The 2023-24 South Carolina Policy Council Free Market Legislative Agenda
The S.C. Policy Council believes that South Carolina has a bright and prosperous future. By embracing policies that limit government, allow for free enterprise, and stand for individual liberty and responsibility, we can ensure our state reaches its highest potential.
During the 2023-24 S.C. legislative session, SCPC will pursue a list of key reforms to put us on this path. Our legislative agenda covers the following areas:
- Taxes and spending
- Legal reform
- Government transparency
- Workforce and regulation
- Healthcare freedom
- Campaign and ethics reform
Taxes and spending
- Accelerated tax relief: After passing much-needed cuts to the state income tax in 2022, which brought the top rate to 6.5% and collapsed the lower bracket to 3%, South Carolina is on the right track with tax relief. However, our state continues to suffer from the highest top income tax rate in the region. North Carolina has a flat rate of 4.75% (and will hit 3.99% in 2027); Georgia’s top rate is 5.75%; and of course, Florida has no personal income tax.
Ideally, South Carolina should leave behind its tiered system in favor of a low, flat income tax in the range of 4-5%. A flat tax is the fairest method, as it is applied evenly to all taxable dollars, and does not penalize jumps in income. Adjusting the “zero bracket,” (meaning the range of income not subject to taxation) is a good way to keep the tax system fair and address regressivity. South Carolina should exclude a reasonable amount of income from taxes to stay competitive with other states and provide relief to residents.
In the meantime, lawmakers should look at speeding up currently scheduled tax relief. Under the 2022 tax cuts, it will take at least five years for the top income tax rate to hit its final mark of 6%, depending on how the economy performs. At a minimum, lawmakers should look at dropping the rate to 6% this year. The cost of doing so would be less than $500 million in state revenue, according to the State Revenue Affairs Office, which surplus funds can likely cover, and that doesn’t account for the economic boost that an all-at-once tax cut would bring.
- Follow the budget law, apply zero-based budgeting: The governor must fully enforce, and the Legislature must demand compliance with, South Carolina’s budget law, which requires state agencies to summarize and justify their entire budgets annually, a practice commonly known as zero-based budgeting. Currently, agencies only give explanations for new spending requests when submitting their budget plans each year. Compliance with the budget law will help identify obsolete, redundant and wasteful government programs; and reduce spending.
- Limit spending based on population and inflation: After voting to increase state reserve funding in 2022, South Carolina should double down on responsible budgeting by limiting annual spending increases based on population growth plus inflation. This key metric serves as an indicator of what the average taxpayer can afford to pay for government services. To assist legislators in this effort, SCPC has created the S.C. Sustainable Budget project, which includes a yearly spending limit recommendation.
- Protect South Carolinians from ESG: The Legislature should explore ways to protect South Carolina taxpayers, businesses and individual borrowers from the negative impacts of environmental, social and governance (ESG) factors. One recent proposal would prohibit state retirement funds from being invested using ESG criteria, which seems like a positive start. However, further action, such as the disclosure of ESG practices, or a total ban on South Carolina financial institutions using ESG criteria, may be necessary.
- Civil liability reform: A major unseen hindrance to job creation and expansion are South Carolina’s grossly unfair civil liability laws. Our state model, known as “joint-and-several” liability, is unfair to businesses named as defendants in lawsuits because they can be required to pay entire verdicts even if they were only partially at fault.
South Carolina should transition to a comparative-negligence system, under which parties in a lawsuit are liable only for their percentage of fault. This is the fairest approach to civil liability, and it does not exclude plaintiffs from recovering damages even if they are partially at fault.
- Judicial independence: South Carolina is one of only two states where higher-level judges are elected by the Legislature, including those on the S.C. Supreme Court, Court of Appeals, circuit court, family court and Administrative Law Court. The selection of local magistrate judges, meanwhile, is often controlled by just one or two state senators in a county, which presents major corruption and conflict-of-interest issues.
We recommend that judges (excluding municipal and probate judges) be nominated by the governor with Senate confirmation, much like the federal model. The legislatively controlled Judicial Merit Selection Commission (JMSC), which nominates higher-level judges before they can be elected, should be significantly reformed or abolished. These changes generally would require a constitutional amendment, meaning voters would have the ultimate say on their outcome.
Magistrate appointments can be fixed by tweaking state law, as the S.C. Constitution already lays ou the desired process of gubernatorial appointment (it was not until later via statute that local senators were inserted into the process.) We recommend removing county senatorial delegations from the nominating process. The practice of letting local lawmakers control the appointment of powerful judges is an urgent issue that deserves immediate attention.
- Civil asset forfeiture: Police in South Carolina can take citizens’ property and cash merely if there is probable cause that it was used in a crime – and getting back those belongings can be a nightmare. As forfeiture is a civil process and not criminal, a person is not entitled to legal representation throughout the proceedings. Worse, the burden of proof is on the individual to disprove wrongdoing, not the government to show it.
While the practice was recently upheld by the S.C. Supreme Court, both the majority and dissenting judges acknowledged that legislative reform is overdue. We urge lawmakers to simplify seizure proceedings by bringing them under the criminal process and to require the creation of a searchable public database with detailed information on seized property. Furthermore, the scope and use of seized assets should be scaled back to limit the financial incentive that comes with taking property.
- Livestreaming: What happens at government meetings has a direct impact on the public. To increase transparency and accountability, these meetings should be livestreamed on the internet, and the video files should be archived for later viewing. Most urgently, we recommend requiring that all legislative committee and subcommittee meetings, and all schoolboard meetings, be livestreamed and archived. Eventually, all state and local government meetings should be streamed.
- Spending transparency: To shed more light on the budget process, lawmakers should expand and codify South Carolina’s earmarking spending rules. Earmarks should have to 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. Additionally, earmark requests should be posted to a designated location on the Statehouse website within 24 hours of the request, creating a real-time earmark transparency dashboard for the public.
- Access to public records: To boost local transparency, lawmakers should revisit this excellent proposal, which would require counties, municipalities and school boards to publish a comprehensive list of public records online, such as budgets and financial reports, contact information for elected officials, a list of all taxes imposed, and more.
At the state level, we recommend that all documents planned to be introduced and circulated at legislative committee/subcommittee hearings be posted to the committee’s webpage at least 24 hours prior to the meeting. Our review of currently published records found that several powerful committees post very few or no documents.
- Public salaries: When it comes to salary transparency for public employees, South Carolina is on the right track. Citizens can easily find salaries for most state employees earning $50,000 or more, thanks to the Department of Administration’s online salary database. The issue, however, is that 16 state entities are excluded from the list, including the S.C. Judicial Department, House and Senate staff, Santee Cooper, and the Ports Authority.
We recommend that all agencies be required to provide salary records to the Dept. of Admin so they can be included in the database. At a minimum, these records should be posted somewhere online. In the meantime, we encourage those missing agencies to provide such records voluntarily so that citizens can better see how their tax dollars are being spent.
Additionally, judges should be required to annually file income-disclosure statements with the State Ethics Commission, as many other public officials already must do.
- Education Scholarship Accounts: After nearly passing in 2022, the time is right for South Carolina to enact the Education Scholarship Account (ESA) program, which would let parents use state funds to pay for private school tuition, textbooks, transportation costs to reach other public schools, and more. The Legislature should explore a plan that lets more families qualify by raising the income threshold over time and expanding eligibility. This powerful program will let parents decide which education path is best for their children, at no extra cost to families.
The Legislature, if necessary, should consider a state constitutional amendment to protect the program and allow for a wide range of educational options to be funded, in addition to pursuing other school choice programs that can work in concert with ESAs.
- Special needs education: Despite good intentions, South Carolina’s special-needs scholarship program is failing to meet its goals, and major change is needed. The program, called “Exceptional SC,” is funded via tax-deductible donations; however, it has not met its fundraising target of $12 million since 2018. As a result, parents are often forced to choose between paying for unfunded tuition out of pocket or pulling their kids from school.
South Carolina needs a solution that: 1) provides consistent funding for special-needs education scholarships, and 2) expands the program to reach more children. One approach could be to make children with disabilities eligible for the Education Scholarship Account program. As another option, lawmakers should consider raising the $2 million cap on tax credits for parents who pay for special needs education out of pocket.
- District school choice: School districts in South Carolina currently set their own open enrollment policies, which govern if and how parents can enroll their children outside of their normally designated schools. As of 2022, only 16 out of 73 local school districts allowed for such choice.
We support locally made policies; however, we also believe parents should have more choice in education. One option might be to require all districts to adopt an open enrollment policy, but let districts work out specific details, as was proposed in the last session. At a minimum, the state should find a way to encourage more districts to adopt open enrollment voluntarily.
Workforce and regulation
- Drastically reduce occupational licensing: The overregulation of work is suffocating business and limiting prosperity in our state. In South Carolina, you need a license to style hair, a license to do nails, a license to give massages, and a special license if you want to cut someone’s hair outside of the barbershop. Of course, each license comes with educational requirements, fees and inspections. It’s no surprise the CATO Institute ranks S.C. 33rd out of 50 on occupational freedom.
A work license should be required only to protect health and safety. Lawmakers should review South Carolina’s list of licensed professions and eliminate licensing requirements for every job outside of this scope. For those where licensing is necessary, we should continue to expand reciprocal agreements with other states.
- Deregulate: Perhaps the only thing that can compete with the volume of South Carolina’s laws are its 139 chapters of regulations, which together form a confusing web of rules and procedures that govern business and public life. Many of these regulations are outdated, harmful to the private sector, and contribute to higher prices. The Legislature should explore how best to eliminate these and help streamline compliance for necessary regulations.
- Adopt short-term rental protections: A recent SCPC report found that a growing number of South Carolina municipalities are passing or considering regulations that hurt the short-term rental (STR) market. The report contended that, if regulation is necessary, it should be done in a way that balances renters’ property rights with community interests. Accordingly, there is a growing need for the Legislature to adopt a general statewide policy establishing basic protections for STRs. One recent proposal would prevent municipalities from banning the rentals, a measure we support.
- Repeal Certificate of Need: South Carolina must end its Certificate of Need (CON) regime, which requires healthcare providers to go through an extensive approval process before constructing or expanding facilities or buying new equipment. It also lets competitors challenge the requests, sometimes delaying construction of a project for years after it’s been approved. Research shows that CON requirements have contributed to higher healthcare prices and less access to services.
A bill to eliminate CON requirements for most state healthcare providers passed in the Senate last year but was never taken up in the House. Lawmakers should make repealing CON a top priority in 2023.
- Give nurses more freedom: South Carolina is one of 11 “restricted practice” states for Advanced Practice Registered Nurses (APRNs), who are specially trained nurses with at least a master’s degree. Here, APRNs are required to have a signed agreement with a physician that outlines the scope of their services before they can start providing patient care. South Carolina should allow these specially trained nurses to operate independently.
- Expand telehealth: Our state should continue to look at ways to expand access to telehealth services, which allow patients to receive medical/healthcare services that are provided remotely. When asked in our survey last year, 74% of state voters said healthcare and insurance regulations should be changed to allow for the most flexible use of telehealth services.
Campaign and ethics reform
SCPC is finalizing a package of recommended reforms to modernize South Carolina’s campaign finance regulations and enforcement. This balanced approach will help to bring more campaign funding into light and encourage more of South Carolina’s political spending to be controlled directly by candidates as opposed to third parties.
We will also offer recommendations on how to increase the enforcement of state ethics and financial reporting laws, and to bring all public officials under the same enforcement entity. Additionally, it will recommend that public officials who file disclosure statements must also report if they received income as subcontractors on government-funded projects.
We’d love to hear from you! If you have questions or comments about our agenda items, email email@example.com. Bryce is SCPC’s senior policy analyst.
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