S.C. budget deal trims tax break, delays local spending

July 24, 2026

1–2 minutes

Summary

South Carolina lawmakers advanced a budget deal with smaller senior tax breaks and delayed decisions on local spending.

Why this matters

The agreement moves South Carolina closer to a full budget after weeks of stopgap funding, allowing teacher and state employee raises to proceed. It also postpones decisions on hundreds of millions of dollars in local projects and Scout Motors-related costs.

South Carolina budget negotiators reached a compromise Wednesday that scaled back a proposed property tax break for older homeowners and delayed decisions on legislator-requested local projects.

Since July 1, the state has operated under stopgap funding at last year’s levels. The agreement allows the broader spending plan to move ahead, including teacher and state employee raises and a $32 million settlement in a lawsuit over Captain Sams Spit.

The deal set aside about $380 million for local projects and cost overruns tied to the Scout Motors site in Richland County, but it did not specify which projects will be funded. A separate legislative panel will review requests and recommend a bill by the end of September.

House Ways and Means Chairman Bruce Bannister, a Greenville Republican, said, “We’re looking at different ways to do those community investments that make both the House and Senate comfortable.”

The House and Senate lists of local spending topped $430 million. The Department of Commerce also sought $150 million for work tied to state commitments to Scout Motors, a Volkswagen subsidiary. No money for that work will be released until the Legislative Audit Council issues a report on the added costs.

The budget included a narrower version of the Senate’s proposed Homestead Exemption expansion. Homeowners age 65 and older will be exempt from property taxes on $75,000 of a home’s value, up from $50,000 under current law. The change will cost the state more than $80 million to reimburse counties for lost revenue.

Although senators had sought exemptions of up to $150,000, Senate Finance Chairman Harvey Peeler said, “I’m really excited about it.” He said senators will try again next year.

It was unclear when the full Legislature would return to vote on the compromise, though lawmakers were expected to hold a brief special session within two weeks. Gov. Henry McMaster will then have five days, excluding Sunday, to issue line-item vetoes.

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