2025-26 State Budget
Budget — H. 4025. The Senate gave second and third readings to its version of the FY 2025-26 Appropriations Act this week, which includes increased funding to the Local Government Fund (LGF) by $14,566,488 statewide. This represents full funding to the LGF under the statutory formula. See the estimated LGF county allocations for FY 2025-26.
Items the Senate funded this year include:
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$66 million to cover a base pay increase for state employees (see proviso 117.141);
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$112 million to cover all the state employees’ and retirees’ share of a projected 4.6% increase in premiums for the State Health Plan (see proviso 108.6);
- $12 million in recurring money for the Rural County Stabilization Fund;
- $750,000 in recurring money for PTSD treatment for first responders;
- $3 million in recurring money to Labor, Licensing, and Regulation for the V-SAFE Fund;
- $3.784 million in recurring money for the Firefighter Cancer Benefit Plan;
- $4.5 million to the Department of Mental Health for the Alternative Transportation Program.
- $1 million in recurring money to supplement the Councils of Governments;
- $1.1 million in additional recurring funding for State Aid to County Libraries to raise the per pupil funding to $2.75;
- $6 million to the Department of Parks, Recreation & Tourism (PRT) for destination-specific marketing grants;
- $5 million in one-time money to the Housing Finance and Development Authority for first-time homebuyers workforce housing;
- $5 million in one-time money to the Rural Infrastructure Authority for the Rural Infrastructure Fund and $5 million for the statewide water and sewer fund;
- $35 million in one-time money and $1 million in recurring money to the Department of Commerce for LocateSC site readiness and $30 million in one-time money for airport enhancements;
- $9 million in one-time money to the Office of Resiliency for the Disaster Relief and Resilience Reserve Fund;
- $5 million in recurring money and $25 million in one-time money to the Conservation Bank for grant funding;
- $100 million in one-time money to the South Carolina Department of Transportation (SCDOT) for bridge modernization and $25 million for repairs needed due to Hurricane Helene;
- $5.35 million in recurring money to the Division of Aeronautics for airport safety and development;
- Over $198 million in one-time money to the South Carolina Emergency Management Division (SCEMD) to match Federal Emergency Management Agency (FEMA) funds for declared disaster relief (including Hurricane Helene) and $1 million for the revolving loan fund;
- $1.5 million in additional recurring money to the Department of Environmental Services (DES) for the air quality program and almost $3.5 million in additional recurring money for the drinking water program;
- $4 million to the Department of Health and Human Services in addition to $10 million from the federal government for opioid treatment services;
- Almost $4 million in recurring money to the Election Commission for annual election costs;
- Almost $20 million in new recurring money to the Department of Veterans’ Affairs (DVA) for veteran homes; and
- $7.5 million in one-time money to the Attorney General’s Office for the Crime Victim Assistance “SAVS” Program.
Please thank the members of the Senate for keeping their promise to counties and working to return much-needed funding to county governments throughout the state!
Provisos
The following provisos of interest were added or substantially amended by the Senate this week during floor debate on the budget:
67.17. DJJ: Capital Expenditure Charge. This new Senate proviso was amended on the floor requiring local governments using the juvenile detention services provided by the Department of Juvenile Justice (DJJ) to pay a capital expenditure charge of $125 per day per child not to exceed 25 days to DJJ to cover capital expenditures and investments in the facilities that house such juveniles. This charge is in addition to the per diem charge of $50 that offsets operating expenses. If full funding is not received by the local governments, then the remainder of the funds due shall be transferred to DJJ from the Local Government Fund on behalf of local governments. The transfer to DJJ on behalf of the local government shall be deemed to have been distributed to the local government. This is more than three times the amount that counties currently pay!
SCAC continues to negotiate with the DJJ director and other stakeholders to work on a permanent solution to this issue through S. 374, a bill that is currently on the Senate calendar.
Please contact your House members and ask that they vote to remove this proviso from the budget!
117.202. GP: Political Subdivision Reimbursement. This new Senate proviso requires manufacturing property currently receiving the partial value exemption to continue to receive the exemption in FY 2025-26. The proviso also increases the reimbursement cap from $170 million to $300 million. To the extent that funds exceed the amounts necessary to make the full reimbursement for the property tax exemption are unavailable, then the balance in the Trust Fund for Tax Relief may be expended to make the reimbursements in full.
27.1. LIB: Aid to Counties Libraries Allotment. The Senate amended this existing proviso that provides that the amount appropriated for "Aid to County Libraries" shall be allotted to each county on a per capita basis according to the official U.S. Census for 2020, as aid to the county
library. No county shall be allocated less than $150,000 under this provision. The amendment requires the funds to be distributed in two equal installments. It also requires that county libraries have an adopted policy in place that they do not offer books or materials that appeal to the prurient interest of children under 17 in the children's, youth, or teen book sections and are only made available with explicit parental consent. A failure to adopt such a policy will result in immediate withholding of the allocation. If the local legislative delegation presents evidence that these requirements are not being met by a county library, the delegation may request a comprehensive review of the certification by the State Library. All remaining funds shall be withheld until the State Library verifies full compliance and issues a written determination of compliance to the delegation.
37.RPS. DAODAS: Real Property Sale Approval. This new proviso, adopted on the Senate floor, provides that no county drug and alcohol authority receiving state funds shall sell, transfer, or otherwise dispose of any real property owned by the authority without prior written approval from a majority of the local legislative delegation representing the county in which the property is located.
43.7. FC: Response to Declared Emergencies. This new Senate proviso transfers up to $3 million to the South Carolina Forestry Commission to help with the control and management of wildfires when declared as an emergency.
55.26. DES: Permitting Timeframes. This existing proviso requires DES to issue a decision on a completed application for a permit no later than 90 days after the date the application is received by the department. DES and the applicant may mutually agree in writing to extend this review period, and the department may not stop, stay, or otherwise alter the review period without a written agreement. The Senate amended this proviso to exclude energy projects whose timeframes are set forth in their version of the comprehensive energy bill, H. 3309.
62.25. SLED: PTSD Treatment Program. This new Senate proviso allows coroners and deputy coroners to be eligible for the PTSD treatment program administered through the South Carolina Law Enforcement Division and the South Carolina Law Enforcement Assistant Program.
63.8. DPS: School Resource Officers. The Senate this week amended this existing proviso relating to the School Safety Program, to allow school districts in “Tier IV Counties” to contract with private companies to hire Class I law enforcement officers to serve as school resource officers.
73.10. ORS: Rural Community Centers. This new Senate proviso directs the Office of Regulatory Staff (ORS) to provide $250,000, subject to funding, to expand the availability of broadband, free wi-fi, and telehealth services in rural community centers.
73.CPC. ORS: Coal Plant Conversion. The Senate adopted this new proviso on the floor this week to require ORS to evaluate the feasibility of converting retiring coal-fired power plants into biomass plants fueled by woodchips or other organic matter. ORS may engage third parties with relevant experience to conduct evaluations, and all costs will be assessed to the electrical utilities on a pro-rata basis and shall be recoverable by the utilities through their base rate fuel costs.
84.17. DOT: Waiver Valuations. This new Senate proviso provides that for state or federal funds appropriated to SCDOT, cause estimates of $20,000 or less for uncomplicated acquisitions of real property—defined as those involving unimproved strips of land with no damage, no changes in highest and best use, or no significant cost to cure—are considered waiver valuations as defined by the Federal Highway Administration and shall not be subject to the Uniform Standards of Professional Appraisal Practice. SCDOT must submit a detailed report on the waiver valuations to the Senate Transportation Committee and the House Education and Public Works Committee by June 30, 2026.
96.OO1. SS: Oath of Office. The Senate adopted this new proviso this week to require that the secretary of state shall notify all boards, commissions, and each clerk of the 46 county councils, that all boards and commissions must provide certification in writing of taking the oath of office by July 31, 2025. A failure to submit the timely certification to the secretary of state would result in a forfeiture of any direct or indirect funding to the board or commission as provided within the Appropriations Act.
100.4. ADJ: Public Assistance Program. This new Senate proviso creates a public assistance program to support disaster recovery under SCEMD, in coordination with the Office of Resilience. This program may be used by local governments experiencing a disaster that is localized and if the statewide damage meets the FEMA threshold of $9 million.
102.1. ELECT: County Board of Voter Registration and Elections Compensation. The Senate amended this existing proviso to increase the compensation rate of board members from $1,500 for each member to $2,500 for each member and from $13,500 per county to $22,500 per county.
102.7. ELECT: Training and Certification Program. The Senate amended this existing proviso, relating to training and certification programs for County Boards of Voter Registration and Elections, to prohibit the State Election Commission from canceling a training course if one or more members are scheduled to attend. The proviso was further amended to provide that all stipends that are withheld due to the failure of a member to attend a required training course must be paid if the member signed up for a course that was subsequently canceled.
108.6. PEBA: State Health Plan. The House version of the budget amended this existing proviso relating to employer premium increases to update the plan year reference and to provide for a subscriber increase of $36.76 per month. The Senate amended the proviso to have the state cover the state employee and state retirees’ share of the increase and to provide for a 4.6% premium increase for employers.
113.DOF. AS-TREAS: Disgorging of Funds. The Senate adopted this new amendment this week to provide for a clawback of Local Government Funds from a municipality if the municipality, by ordinance, prohibits medical and mental health professionals from providing conversion therapy or reparative therapy to minors at any time during the fiscal year.
117.82. GP: Civil Conspiracy and Defense Costs. The existing proviso states that for any claim that has not reached a judgment, if a state or local government employee or former state or local government employee ("government employee") is personally sued for civil conspiracy, the employee must be provided legal counsel by the governmental entity and/or their insurer upon the submission of an affidavit executed by the agency head or his designee that the employee was acting within the scope of employment or in good faith. No insurer that provides insurance for any governmental entity may exclude coverage for civil conspiracy.
The Senate amended the proviso on the floor this week to delete the following language:
“Prior to trial, the court must make a final determination whether the action or decision giving rise to the suit was made by the government employee within the scope of their official duty or in good faith. If the court finds that the government employee was acting outside the scope of the employee's official duties or not in good faith, the government or their insurer shall not expend any funds to pay or defend the claim including funds for the employee's legal counsel. If the court finds the government employee was acting within the scope of their official duties, the employee is immune from suit, liability, and damages with respect to the civil conspiracy claim. The government may only expend funds to defend the claim if the determination is that the employee was acting within the scope of their official duties or in good faith. Nothing in this proviso prevents an insurance provider from defending and paying, respectively, any claims that the provider has contractually agreed to defend and pay.”
117.105. GP: Refugee Resettlement Program. The Senate amended this existing proviso to remove a county council’s authority to approve a refugee resettlement program before state funds can be expended.
117.164. GP: Land Acquisition. The Senate amended this existing proviso to provide that for funds distributed to acquire interests in land for natural resource preservation or rural preservation, the Department of Natural Resources (DNR), PRT, the Office of Resilience, the Forestry Commission, and the Conservation Bank must collaborate to maximize the most cost effective options for purchasing property and providing the greatest public benefit. Budget requests must be submitted to the Executive Budget Office, which must prepare a report to the General Assembly by Aug. 15 each fiscal year.
117.TPG. GP: Third-Party Grants and Contracts. The Senate adopted this new proviso this week to require each state agency receiving funds that are then awarded as a grant or contract to a third-party organization, including local governments, to submit a plan of how the state funds will be spent and how the expenditures will provide a public benefit. Prior to distributing the funds, state agencies must acknowledge that they will be subject to civil and criminal penalties for any misuse and that records of funding are subject to review by the Office of Inspector General, State Auditor, or the granting agency. Each receiving entity, including local governments, must retain relevant records for five years.
The Senate adopted the following provisos of note that were added in the House version of H. 4025:
118.20. SR: Homestead Exemption Fund. Amends the existing proviso to direct over $121,000,000 in one-time money from the Homestead Exemption Fund to be distributed as a one-time, nonrecurring appropriation by Sept. 30, 2025, to the General Fund to provide income tax relief.
117.141. GP: Employee Compensation. Amends the existing proviso to provide a salary increase to state employees. Salaries shall be increased to either the minimum of the new state pay grades established by the Department of Administration, or 2%, whichever is greater.
117.191. GP: Fraud Mitigation. Requires all state agencies that issue checks as a benefit to the general public—rather than as payment for services rendered, and that do not use the procurement process for such disbursements—to develop and implement measures to mitigate the risk of fraud. The Senate amended the proviso to delete language from the House that would have required agencies to also compile a report detailing fraud mitigation measures implemented, any incidents of fraud detected, and corrective actions taken.
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