SCPC's 2024 Roadmap to Reform

Our mission: Since 1986, the S.C. Policy Council has existed to promote the principles of limited government, free enterprise, and individual liberty and responsibility. We believe that advancing policies in line with this mission will help South Carolina reach its highest potential.

Roadmap to Reform

South Carolina is trending in a positive direction as we begin year two of our 2023-24 legislative session, which starts Jan. 9. This report – which builds upon our Legislative Agenda published last year – serves as a roadmap for how South Carolina can stay on the right track, deliver even more reforms in 2024 to advance liberty, and avoid setbacks and policy mistakes that might undermine recent legislative progress.

To achieve this, we offer clear policy recommendations, and where possible, list corresponding bills supported by this organization that would improve South Carolina. Our report broadly covers the following areas:

Reducing taxes and government spending
Adopting legal changes to ensure judicial integrity
Increasing state and local government transparency
Expanding educational choice for students and families
Slashing burdensome regulations and improving healthcare access
Previewing our 2024 Legislative Scorecard

Reduced taxes and spending

Spending restraint

We propose a two-step approach to identify and cut wasteful government spending and save taxpayers’ money.

First, South Carolina must annually start its budget process in accordance with state law, which effectively requires zero-based budgeting. Under this model, expenses should be justified annually based on their performance, without regard to prior-year spending.

According to the law, state agencies are supposed to justify their entire budgets (both current funding and newly requested money) each year when submitting their annual spending plans to the S.C. Executive Budget Office. Each program to be funded – old and new – should explain its purposes, goals, and other measurements that might help with its evaluation. However, as SCPC recently revealed, agencies provide details only for new spending requests.

The governor must enforce the law – requiring agencies to justify their entire proposed budgets – so that legislators have a full picture of how taxpayers’ money will be spent as they draft the budget. During this review process, programs found to be underperforming, redundant or obsolete should be cut or reduced.

Second, we urge legislators to follow our S.C. Sustainable Budget (SCSB) – a project designed to keep state spending under control. In short, the SCSB sets a cap on annual budget appropriations based on state population growth plus inflation, a metric that generally conveys what the average taxpayer can afford to pay for government services. The money saved by following a sustainable budget will make it far easier to cut taxes in the future. (Note: SCPC’s FY25 Sustainable Budget report will be published during the second week of January.)

Buying down the income tax to 6%

Using the money saved by following our budget recommendations, in addition to next fiscal year’s projected recurring revenue surplus (approx. $673M), legislators should buy down the top income tax rate immediately to 6%. Not only would this let taxpayers keep more of their hard-earned money, but it would also make South Carolina more competitive in the region as North Carolina and Georgia aggressively cut their income taxes. At the moment, we rank 30^th based on our personal income tax nationally.

If the Legislature doesn’t act, S.C. taxpayers will have to wait years to get full and proper tax relief. At present, our top personal income tax rate (6.4%) is on track to shrink annually by .1% until it hits 6% – and these marginal cuts only trigger if state revenues meet yearly growth targets. At the earliest, the tax cut won’t fully phase in until 2027. Therefore, we urge lawmakers to use the projected surplus to lower the rate to 6% immediately.

Minimizing the impacts of ESG

Across the country, powerful financial institutions are making investments and offering services based on environmental, social and governance (ESG) factors in place of traditional investment criteria – a trend that could have a major impact on South Carolina and local businesses. At a minimum, legislators must take action to protect the state pension system from ESG interference, ensuring citizens’ hard-earned retirement dollars are invested based solely on factors meant to produce the best returns.

One proposal (H.3690), which passed the House last year, would shield state retirement funds by requiring shareholder proxy votes to be cast based on “pecuniary factors” (meaning those affecting risk or return and excluding factors that promote ESG). It would also limit when the Retirement System Investment Commission can delegate proxy-voting rights to investment managers. This is a positive start; however, further action, such as the required disclosure of ESG practices, or a total ban on South Carolina financial institutions using ESG criteria, could ultimately be necessary.

Legal reform

Improving the judicial selection process

Reforms are needed to restore the integrity of our courts and improve public trust. Under our current system, lawyer-legislators primarily control the selection of South Carolina’s judges, fueling potential or actual conflicts of interest in the courtroom. In addition, the process by which judicial candidates are screened and nominated is hard for the public to follow due to lackluster transparency efforts.

We recommend prohibiting lawyer-legislators from serving on the 10-member Judicial Merit Selection Commission, which screens and nominates judicial candidates prior to election by the General Assembly.
We suggest giving the governor most, if not all, of the appointments to the JMSC, whose members are currently selected by just three legislators. In addition to evening out the selection process, this change would bring a central executive – the governor – into the equation, who would be accountable to all S.C. voters for his appointments.
We propose striking or raising the statutory cap that prevents more than three qualified candidates from being nominated for each vacant judicial seat.
We suggest livestreaming all JMSC hearings and posting the videos online for subsequent viewing.

Of the many bills that would revise our judicial selection process, S.178 is perhaps the most representative of reform. It would prohibit legislators, their immediate family members, and their associates from serving on the JMSC; it would shrink the JMSC from 10 members to seven and let the governor control all of its appointments; and it would remove the three-person cap on nominees per vacant seat, among other changes.

Meanwhile, H.3932 would require all legislative committee meetings to be livestreamed, including JMSC hearings.

A more comprehensive list of our proposed judicial reforms can be viewed here.

Reforming the magistrate system

Issues surround our method of selecting magistrate judges, who play a vital role in our legal system, handling traffic tickets and other minor criminal and civil cases. In South Carolina, magistrates are effectively hired and fired by small groups of state senators (sometimes just one or two of them) – and at the moment, nothing prevents these senators, many of whom are attorneys, from practicing law in front of magistrates they helped appoint to the bench.

H.3535 would improve, though not fully reform, the magistrate selection process. It would require Senate delegations to submit the names of two candidates (instead of one, as is current practice) for nomination to each vacant magistrate position – and all magistrate candidates would first need to apply to and be screened by the JMSC. Meanwhile, S.409 would make it unlawful for a senator to appear as an attorney in a magistrate’s court in a county represented by that senator.

Reforming our unfair civil liability system

In many states, if you cause someone harm, you pay your share of damages – no more, no less. But not in South Carolina. Here, businesses and individuals can be forced to pay entire legal verdicts despite only being partially at fault for an injury, a concept known as “joint and several” liability. In addition to making our state less attractive for jobs and investment, this punishing system threatens to put local small- and medium-sized companies out of business after a single lawsuit.

Ideally, South Carolina should adopt a liability system that assigns damages based on fault, not ability to pay, which could be achieved through H.3053. In the short term, two bills (H.3933 & S.533) would address problems with the current law and reduce the number of businesses forced to pay unfair damage awards in civil cases, though would not fully resolve the issue. We cover this topic in detail in a 2023 report.

Government transparency

An open government is necessary for any healthy society to function. SCPC supports reforms in four broad areas to improve state and local transparency and facilitate public engagement, which are detailed below:

Transparency for taxpayer-funded incentives – To facilitate transparency and public input when it comes to taxpayer-funded incentives for companies locating or expanding in the state, we propose at least three changes: 1) Hold public hearings on proposed incentives prior to their approval; 2) Conduct third-party reviews of proposed incentives to determine their true costs and benefits; and 3) Require counties to publish annual incentives reports. More information about these proposals can be found in our recent policy report, which follows months of reporting by our investigative news site. The Nerve, uncovering alarming secrecy surrounding the Scout Motors incentives deal.

Separately, a bill (H.4699) pre-filed in December would prohibit the state or any locality from offering incentives to a company that uses a scoring system based on ESG criteria. More broadly, we discovered that four states (Illinois, Florida, New York and Michigan) have filed bills to ban the use of non-disclosure agreements in economic development deals, which is another option to force more transparency in our corporate-welfare system.
Livestream public meetings – For two years, SCPC has monitored how often legislative committee meetings are streamed to the public – a project we will continue in 2024. Last year, we found that two committees, the House Education and Public Works Committee and House Judiciary Committee, streamed 100% of their meetings. Unfortunately, we also found that three committees did not stream a single meeting during the regular session: the Senate Banking and Insurance Committee; the Senate Fish, Game and Forestry Committee; and the House Ethics Committee.

Under 3932, all legislative meetings would need to be livestreamed and have their videos posted online for later viewing, including JMSC hearings. And under S.134, all S.C. school boards would need to livestream their meetings and post the videos online. S.134 unanimously passed the Senate last year, and we encourage a speedy passage through the House in 2024.
Spending transparency – Lawmakers should expand and codify current earmarking spending rules, making it easier for taxpayers to follow how their money is spent in South Carolina’s yearly budgets. For optimal transparency, earmarks should be requested in writing to the House or Senate budget chairmen on forms that disclose the sponsor’s name, the date requested, the amount requested, a description of the project, the state agency through which the money would flow, and the full name of the recipient entity. That form should be posted on the Statehouse website within 24 hours of filing. This could be achieved by passing 3932.
Access to local records and public salaries – Important public records prepared by counties, municipalities and school boards should be published online and made easily accessible to citizens. These include, but are not limited to, all budgets and financial reports, meeting agendas and minutes, contact information for elected officials, and taxes and fees currently imposed.

Additionally, we suggest that all state agencies provide employee salary data to the Department of Administration so they can be listed in the department’s publicly accessible salary database. At present, 16 entities are excluded from this list, including the C. Judicial Department, House and Senate staff, Santee Cooper, and the Ports Authority. Both proposals in this category could be achieved by passing H.3932.

Another bill (H.4643) named the “Taxpayer Transparency Act” would require county councils to develop and publish a searchable budget database and livestream all their public meetings.

Enhancing education

Passing Academic Choice in Education (ACE)

South Carolina can dramatically expand school choice by passing the Academic Choice in Education (ACE) bill (S.285), which cleared the Senate in 2023. The program would offer scholarships, funded via private tax-deductible contributions, to families across the state to pay for expenses like private school tuition, textbooks, tutoring and homeschool materials.

As currently written, the following students would be eligible: (1) students with disabilities; (2) students from low-income families; (3) students from middle-income families; and (4) homeschool students.

The program would not cap student enrollment, though funding would be limited based on annual caps to applicable tax credits. Under the current proposal, the total cap is $15 million each for special-needs, low-income, and middle-income scholarships; and $10 million for homeschool scholarships.

Pursuing universal school choice

South Carolina made history in 2023 by passing an Education Scholarship Account (ESA). The program will help thousands of families pay for K-12 expenses of their choice, including private school tuition, textbooks, tutoring, computers, extracurricular activities, fees for approved tests, or transportation costs of reaching a new public school.

To expand access and bring South Carolina closer to universal school choice, legislators should consider removing the ESA’s enrollment cap (15,000 students when fully implemented by 2026-27) and income restrictions that will limit student participation.

Adopting statewide open enrollment

After passing the House in 2023, a statewide open-enrollment bill (H.3843) is waiting to be considered by the Senate Education Committee. The bill would require every school board to adopt an open-enrollment policy, allowing parents to enroll their children outside of their normally designated schools where feasible. The change is another way South Carolina can pursue universal school choice by providing more options in the public school system.

Deregulation and expanding healthcare access

Reducing the licensing burden

The overregulation of work is suffocating business and limiting prosperity in our state. In South Carolina, you need a license to style hair, do nails or give massages; and a special license if you want to cut someone’s hair outside of a barbershop. SCPC is committed to working with legislators this year to reduce the regulatory burden on business professionals and make South Carolina a freer state to work. One such bill, H.4580, would allow cosmetologists, estheticians and nail technicians to provide services at a client’s home or at an event venue, which is currently prohibited except in cases of emergency.

In addition, we will vigilantly advocate against new licensing rules and regulations that threaten to stifle emerging and creative industries.

Improving healthcare access

After repealing the longstanding Certificate of Need law in 2023, legislators should take additional steps to improve healthcare access and reduce patient costs. Advanced Practice Registered Nurses (APRNs), who undergo special training and education, should be permitted to operate independently to better serve the needs of patients. South Carolina is one of only 11 restricted practice states for APRNs, meaning they must have an agreement with a physician outlining their scope of services before they can start providing care.

Meanwhile, H.3877 would increase the number of anesthesiologists’ assistants (AA) whom an anesthesiologist can supervise from two to four. It would also streamline the AA licensing process by striking the rule that applicants must appear before a member of the Board of Medical Examiners and present academic credentials and knowledge before receiving a license.

The bill passed the House last year and should be an early priority for the Senate in 2024.

2024 Legislative Scorecard

Following a successful debut in 2023, SCPC is gearing up for another Legislative Scorecard covering the 2024 session. It will reveal the votes of all 170 members of the S.C. General Assembly on major bills, primarily dealing with the reforms listed above. Legislators will earn one of four possible ratings based on their commitment to advancing freedom: Excellent, Favorable, Unfavorable or Poor.

Our scorecard is created with two goals in mind: 1) To give citizens the tools and information to hold their representatives accountable on major issues; and 2) To recognize the Legislature’s most committed free-market champions. We hope you look forward to the new report, which will be published sometime following the end of the regular session.