Lots of tax relief, raises in Gov. McMaster's new budget plan

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COLUMBIA (AP) — South Carolina Gov. Henry McMaster wants to give back nearly a quarter of the state's almost $2 billion surplus through rebate checks based on how much tax someone pays and a five-year plan to cut income tax rates.

McMaster released his spending plan for next budget year on Monday, one day before lawmakers return for the 2020 session.

"We need to give as much of that money back to the taxpayers as we can. It is when the taxpayers spend their own money that the economy continues to grow," McMaster said at a news conference Monday.

The governor's plan on how that state spends the $10 billion under lawmakers' control isn't binding.

Legislators will have the final say.

But the governor's office said it worked closely with House and Senate leaders for a proposal that both highlights what McMaster thinks should be the state's priorities and has a good chance of staying in the spending plan through the five-month budget process.

The first item on the governor's 39-slide explanation of his plan is $425 million in tax cuts and rebates.

McMaster wants $250 million to go toward rebates. Unlike the $50 checks that went to 1.2 million tax filers who paid at least that much in income tax late last year, the next round of proposed checks would be prorated.

The biggest taxpayer in the state would get $265,000 back. Next up would get $101,000 and on down the line to the $50 checks for people who put at least $50 into the government, according to the spending plan.

McMaster also wants to use the surplus to start a five-year tax cut to lower the state income tax rate for most filers from 7% to 6%. The cut would cost $160 million next budget year and eventually reach $2.5 billion by 2025.

If the state continues to tax its people too much even in the best of times, it will be like the fable of the man who killed the golden goose because of greed, the governor said.

"We have to give some of that back to the goose to keep the goose moving," McMaster said.

The governor's budget does include additional spending. But McMaster said it holds to his requirement that government only get involved in the critical needs of the people.

"We could always find things to spend money on. We could gold plate the dome if we wanted to. But that is not a critical need," McMaster said.

Other highlights of McMaster's budget released Monday include:

  •  $100 million for improvements at state prisons from new electronic laws to repairs on guard towers and increased money on investigating gangs.
  •  $38 million to state law enforcement agencies to recruit new employees and increase salaries as they see fit. McMaster's plan does say he wants the Highway Patrol to hire at least 100 additional troopers.
  •  $213 million for a previously announced $3,000 across-the-board raise for all of South Carolina's more than 50,000 public school teachers.
  •  $33 million on state employee raises. That could provide a 2% across-the-board raise, but McMaster instead wants to give state agency leaders flexibility on how the raises are handed out.
  •  $23 million to make sure there is a police officer in every public school in the state every day.
  •  $71 million to pay for new math textbooks across the state to get rid of old ones based on Common Core standards.
  •  Increasing the reimbursement for school supplies for teachers from $275 a year to $400 a year.
  •  $9 million so every beneficiary on the state employees health plan can get a free checkup each year.
  •  Closing the state's defined benefit pension to new employees at the end of 2020. Currently, South Carolina has about $24 billion in unfunded liability in the state retirement plan.
  •  Revamping the business license system under one state umbrella. Currently, counties and cities each have their own requirements and fees, requiring businesses like contractors to buy a dozen or more licences in some areas. This proposal is backed by the South Carolina Chamber of Commerce.