Gov. McMaster pitches quarter-billion disaster relief effort as part of his 2025 budget
Story Date: 1/14/2025

Gov. McMaster pitches quarter-billion disaster relief effort as part of his 2025 budget
By Nick Reynolds
3 hrs ago 
 
COLUMBIA — Gov. Henry McMaster is asking the state Legislature to finance nearly a quarter-billion dollars in disaster relief after a devastating 2024 storm season that left dozens of South Carolina residents dead and millions of dollars in property damage.

The $240 million request — included in his 2025-26 budget proposal — represents one of the largest single line items in the state budget this year, and only a fraction of the total estimated damage of one of the worst hurricane seasons in South Carolina's history. 

But it's a necessary expense.

The brunt of the damage, sustained during Hurricane Helene in September, consisted of 6,300 damaged homes, 912 road and bridge closures, and some $621 million in agricultural losses.

Most of the money for disaster recovery will come from the federal government while the Federal Emergency Management Agency has pledged to reimburse South Carolina for 100 percent of its costs in the 120 days following Helene. But while Congress approved some $110 billion in disaster relief funding for impacted states, few of those dollars have made it out the door. 

Even after all that money has been spent it's likely some of the damage incurred last year will be ineligible for reimbursement, leaving the state to make up the difference.

Of McMaster's budget request, $50 million will go toward the state Department of Transportation for costs like debris removal and road repairs, while an additional $40 million will go to the S.C. Office of Resilience to replenish funds that were utilized for immediate relief efforts during Helene.

An additional $150 million will be used to create a new grant program within the state Emergency Management Division to enable local governments, utilities, nonprofits and other groups to apply for funding that was either denied by the federal government or did not meet FEMA thresholds.

And in response to significant power outages caused by the rampant toppling of electric lines during the storm, McMaster's office plans to recommend a budget proviso directing the Office of Regulatory Staff to take on a comprehensive study of the economic and technical feasibility of moving the state's major power lines underground.

The relief funds, while one of the most significant new expenses in the state budget, amount to only a small share of McMaster's 2025-26 budget, which includes a variety of spending recommendations ranging from tax cuts and teacher pay raises to funding for a new neurological hospital and various government reforms.

The governor’s proposed budget is just that: a proposal. The House and Senate draft their own spending plans, which are typically combined in a compromise deal in the spring.

Highlights from his budget released Jan. 13 include: 

From pre-school to higher education
When McMaster took office in 2017, the starting minimum wage for a public school teacher was a little more than $30,000 per year. This year, McMaster is proposing to increase that number to $50,000 for the first time in state history, completing a longstanding policy goal one year early and giving South Carolina's education system one of the most competitive salary floors in the Southeast.

McMaster also wants $21 million to assign trained school resource officers at each of the 177 schools statewide that currently lack one, and has ambitions to expand the budget for the state's increasingly popular 4-year-old kindergarten program by several million dollars.

McMaster additionally proposed a $100 million appropriation for the development of a new neurological hospital to be run by the University of South Carolina in Columbia's Bull Street District.

The biggest costs will be in managing the cost of education.

While McMaster is proposing a sixth consecutive year of tuition freezes for in-state students at South Carolina colleges, his office said it will be implementing new methodologies for calculating how much they give each individual school.

Lottery challenges
Another challenge for McMaster's budget will likely come from the state's education lottery.

Declining revenues — and the possibility the program's scholarship fund may potentially be used to help finance a proposed private school voucher program currently under consideration in the S.C. Senate — are likely to leave the fund too overburdened to cover all the scholarships it is supposed to finance.

This year's budget proposal is taking a conservative approach to the problem.

In all, McMaster proposed $30 million in his budget to fund that program, an amount well-below the envisioned $131 million the voucher program's authors estimated them to cost once fully realized.

And in a seeming reversal of his long-standing opposition to gambling, McMaster endorsed a long-gestating proposal in the legislature from the past several sessions to allow residents to purchase lottery tickets using debit cards, potentially generating an additional $52 million for the fund per year.

"Thousands depend on it," he said of the lottery-funded scholarships. 

Rethinking public benefits
State employees won't be getting pay raises this year. But they will receive their 13th consecutive year of stable health insurance costs, with McMaster proposing $112 million in funds to offset cost increases by providers.

Yet the cost to do so — now at $449 million over the past four years — has become "unsustainable," McMaster said. Moving forward, vendors for the state will need to identify cost-savings they can implement each year. 

After several years of absence under President Joe Biden's administration, McMaster's office signaled they would also be looking to reimplement work requirements to access Medicaid benefits amounting to 80 hours per month. 

Tax cuts
Citing the state's strong economic performance, McMaster said he wants to accelerate the ongoing schedule to cut income taxes from 6.2 percent to an even 6 percent — a shift that will cost the state an estimated $193.5 million in lost revenues. 

Some in the Legislature have suggested they could move to cut income taxes even deeper this year: a prospect McMaster was not opposed to, but said could force the state to make some "choices" about where it prioritizes its spending. 

He remained optimistic the state could avoid it — as well as the potential for problems should the economy turn sour.

"We have the beauty of our economy is growing," he told reporters.