House Sergeant at Arms Mitch Dorman engages in a conversation with Rep. Jay West, R-Belton, and Ways and Means Chairman Bruce Bannister, R-Greenville, during the commencement of the 2024 legislative session at the Statehouse on Tuesday, Jan. 9, 2024, in Columbia, S.C.
South Carolina homeowners may soon see significant savings on their property taxes in the upcoming year. The House of Representatives has started discussions on a proposed budget that aims to bring these potential savings to fruition. If approved, homeowners in the state can expect to save hundreds of dollars on their property taxes.
Homeowners across the state can look forward to a significant reduction in their property tax bills on owner-occupied homes. As part of the upcoming fiscal year’s spending plan, a total of $500 million will be allocated towards this purpose. This initiative aims to alleviate the financial burden on homeowners and provide them with much-needed relief. The plan, which amounts to a $13.2 billion spending package, will go into effect starting July 1.
The House budget-writing committee’s proposal includes pay raises for teachers, law enforcement officers, and state employees.
South Carolina’s 46 counties would receive a portion of the $500 million tax relief based on their respective populations. Homeowners’ property tax bills would be reduced according to the assessed values of their properties. No additional paperwork or actions would be required from homeowners, as the county would automatically apply the credit to property tax bills distributed this fall. House Ways and Means Chairman Bruce Bannister, R-Greenville, confirmed this process.
According to the budget briefing provided by his committee, the average tax credit would amount to $359.
The funds are sourced from a specific account that was established for the purpose of property tax relief. This account was created as part of a 2006 law that aimed to assist homeowners through a tax swap. The law, commonly referred to as Act 388, entailed the removal of school operating costs from homeowners’ tax bills. In order to compensate for the revenue loss experienced by counties, the state sales tax was increased by one cent on the dollar, raising it from 5% to 6%.
McMaster: Put $500M in state surplus toward fixing SC bridges
For 13 years, the state fell short of covering what it was obligated to send counties through the sales tax. As a result, legislators had to rely on alternative state taxes to compensate for the shortfall. However, in 2020, the situation took a turn for the better as the state began to witness a surplus from that very penny. By the summer of this year, it is anticipated that the cumulative surplus will reach an impressive $600 million.
The tax credit, similar to the law itself, will only be applicable to homes where the owner resides. This means that the tax break will not be available for rental properties, businesses, and vacation homes.
In a letter sent in December, Gov. Henry McMaster proposed that the lawmakers allocate the $500 million towards the much-needed repairs of the state’s aging bridges. Nearly a third of South Carolina’s 8,400 bridges are either approaching or have already surpassed their intended lifespans, making it crucial to address this pressing issue. McMaster emphasized the importance of utilizing the funds to make a significant impact on this critical need within the state.
According to Bannister, the money was not meant for that purpose. He highlighted that a specific provision in the law enacted in 2006 dictates that any surplus funds should be returned to the property owners.
In a conversation with the SC Daily Gazette, he shared that they disagreed with the governor’s suggestion to allocate the funds for road maintenance.
The Department of Transportation will receive funding for bridge repairs through the proposal, but it will be distributed gradually and not sourced from the Act 388 account.
The agency requested a total of $1 billion over five years, and as a first installment, it has received $200 million. This amount matches the funding that was initially passed by the House last year, before being removed by the Senate.
Raises
The House’s proposed budget aims to increase the minimum salary for first-year teachers to $47,000, which is higher than McMaster’s suggested minimum of $45,000 for the upcoming school year. The goal is to gradually raise the minimum salaries to $50,000 by 2026.
The House plan, like the governor’s proposal, aims to address the issue of teacher compensation. One notable aspect of the plan is the extension of state-paid yearly boosts for experience. Unlike the current system that stops at 23 years in the classroom, the proposed plan would continue providing step increases through 28 years. This change has long been advocated by teacher advocates who believe that it is crucial to reward the state’s most experienced educators for their dedication and expertise.
House budget writers ignored McMaster’s suggestions to consolidate the salary schedule. According to the Ways and Means plan, teachers would still receive annual increments based on their experience, along with salary increases within the current five categories of education degrees: Bachelor’s, Bachelor’s plus 18 hours of credit, Master’s, Master’s plus 18, and Doctorate’s.
Districts across the state will be allocated a total of $230 million to boost teacher salaries. As a result, the spending per student in K-12 classrooms will rise by more than $400, reaching a total of $8,636, as outlined in the budget briefing.
The purpose of the raises is to tackle the issue of a rising number of teacher vacancies. At the start of the current school year, there were approximately 1,400 unfilled teaching positions, along with an additional 200 vacant support roles. This marks a 9% increase compared to the previous year, as reported by the Center for Educator Recruitment, Retention & Advancement.
The proposal for K-12 education includes various allocations of additional funds. Specifically, $40 million has been designated for classroom instruction materials, $35 million for the purchase or leasing of school buses, $20 million for school safety upgrades, $5 million for mapping out every school to aid first responders during emergencies, and $30 million to support the first year of scholarships in the voucher program, pending approval from the state Supreme Court.
State employees are also in line for salary increases.
Under the House’s proposal, individuals earning $66,667 or less would receive a $1,000 salary increase. Those earning more than that would be granted a 1.5% raise. It is worth noting that all employees received a minimum raise of $2,500 last year.
According to Representative Phillip Lowe, R-Florence, the allocation of $30 million towards increasing law enforcement salaries last year played a significant role in both attracting and retaining officers.
State law enforcement officers, including those employed by the State Law Enforcement Division and the departments of Public Safety and Natural Resources, are set to receive additional raises as part of the proposed budget.
The departments would receive a total of $2.6 million to boost salaries. However, the Department of Corrections is not included in this list as it has already been successful in attracting employees through previous raises, according to Lowe.
The exact look of the raises for the upcoming fiscal year will depend on the agency, he added.
