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The State House Gavel
The State House Gavel shares updates about the South Carolina General Assembly, including legislative actions, debates and discussions. Featuring news and interviews, so you have access to the latest developments in policy and decisions that shape South Carolina’s future.

The State House Gavel: Income tax rate plan scored, Senate moves to energy in Week 12

South Carolina Public Radio | By Maayan Schechter,
Gavin Jackson, Russ McKinney
Published April 1, 2025 at 6:01 AM EDT
The South Carolina Statehouse
GAVIN JACKSON
The South Carolina Statehouse

Statehouse reporters Gavin Jackson, Russ McKinney and Maayan Schechter are back at the Capitol reporting what you need to know when lawmakers are in Columbia. They'll post news, important schedules, photos/videos and behind-the-scenes interviews with policymakers.

Happy Tuesday and happy first day of April.

Welcome to Week 12 of the South Carolina legislative session.

Scheduling reminder: The 2025 regular session ends Thursday, May 8, and lawmakers have been pretty consistent that they don't intend to return to Columbia after that date except to finish the budget and the governor's vetoes.

You're reading The State House Gavel, a daily reporter notebook by reporters Gavin Jackson, Russ McKinney and Maayan Schechter that previews and captures what goes on at the South Carolina Statehouse this year while lawmakers are in session.

Notebook highlights:

  • The S.C. Revenue and Fiscal Affairs Office dropped its fiscal impact of the income tax rate plan that will start in the House.
  • Republican Sen. Larry Grooms sat down with Gavin Jackson on This Week in South Carolina. Hear what he told the TWISC host about the latest updates in the saga over the $1.8 billion accounting error.
  • A breakdown about what else we're watching in Week 12, from the House's debate over DEI and hands-free driving, to the Senate's second confirmation hearing for Dr. Edward Simmer to lead the public health department and the energy debate begins.
Russ McKinney, Maayan Schechter and Gavin Jackson
SCETV
Russ McKinney, Maayan Schechter and Gavin Jackson

House income tax impact

Tuesday morning, a House Ways and Means budget-writing subcommittee will take up H. 4216, the chamber's plan in conjunction with the Senate to flatten the income tax rate for all filers.

And, hours ahead of that hearing, the South Carolina agency charged with scoring legislation has released the revenue impact.

It's an ambitious plan to wrap up in roughly a month, but Republican leaders in both chambers have told reporters they plan to send this bill to the governor's desk this year.

So what does the bill do?

  • It changes the starting point for taxable income to federal adjusted gross income by eliminating the federal standard and itemized deductions, but creates a new deduction for taxpayers with lower wages.
  • It then calls for going from a three-rate marginal structure of 0%-3%-6.2% to a flat rate for all taxpayers of 3.99% 
  • If the economy remains strong, the rate is further lowered to 2.49%.

What is the state's income tax rate now?

State leaders have long complained that the "sticker price" of the state's top nominal rate is misleading, arguing that the effective impact on taxpayers is far lower than the rates would indicate.

A few years ago, lawmakers began reducing the top rate from 7% to what is now 6.2% as part of a phased-in approach that budget writers worked in to protect revenues. The governor and lawmakers have committed to further reducing the rate, that they say make the state look uncompetitive to neighboring states.

Currently, 44% percent of state filers have no liability, meaning they do not pay income tax. That leaves 10% of filers paying about 63% of the total tax liability.

And, importantly, 44% to 45% of the state's budget revenue comes from income tax collections.

What does the bill mean for taxpayers?

The bill will impact each filer differently.

But the impact says for a 3.99% rate:

  • 21.2% of returns will not see a change to tax liability
  • 19.4% of returns will see lower tax liabilities
  • 59.4% of returns will see an increase in tax liability
  • The number of filers who have no tax liability will drop from 44% to 23%.
S.C. REVENUE AND FISCAL AFFAIRS OFFICE

For a 2.49% rate:

  • 77.2% of filers will see a decrease in their tax liabilities
  • 22.8% of filers will see no change in tax liability
S.C. REVENUE AND FISCAL AFFAIRS OFFICE

What about the state impact?

The S.C. Revenue and Fiscal Affairs Office, the legislative bill scoring office, says the bill's cut to 3.99% would reduce revenues per year by $216.6 million. However, lowering the rate further to 2.49% could cut state revenue by an additional $2.51 billion.

You can view the entire fiscal impact study here.

What are lawmakers saying?

House Speaker Murrell Smith, R-Sumter, last week dropped by WACH Fox to sell the plan, saying the shift will put South Carolina more in line with its true effective rate.

"There are winners and losers in every tax system. And, so, what the beauty of this is, is everybody's treated the same," Smith said.

In a statement from the hardline House Freedom Caucus, the more than a dozen or so members said the bill is "not a good faith effort from leadership." And, without changes, the group said they will push for amendments on the floor.

The South Carolina House of Representatives in Columbia, S.C.
MAAYAN SCHECHTER
The South Carolina House of Representatives in Columbia, S.C.

Senate preps to take steps on Loftis

With a stacked calendar ahead of the May 8 deadline to stop legislative work, the Senate is preparing to hold an unprecedented hearing over the future of the state treasurer.

State Sen. Larry Grooms told This Week in South Carolina host Gavin Jackson that there is "overwhelming support" in the upper chamber to remove Republican Treasurer Curtis Loftis.

Recall: Loftis is the third state official entangled in a $1.8 billion discrepancy accounting error, and, so far, the only official who has declined to resign. Former Comptroller General Richard Eckstrom resigned two years ago after public disclosure of a larger $3.5 billion error, and former Auditor George Kennedy resigned in January as legislative pressure mounted.

Loftis has resisted calls to step down, and defended his office from allegations that he covered up the $1.8 billion error that resulted in the $3 million hiring of an outside audit firm AlixPartners — which found that $1.6 billion of the error was in fact not real cash — and is part of a broader federal Securities and Exchange Commission investigation.

South Carolina Treasurer Curtis Loftis speaks at a Statehouse hearing on Wednesday, Jan. 29, 2025, in Columbia, S.C. (AP Photo/Jeffrey Collins)
Jeffrey Collins/AP
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AP
South Carolina Treasurer Curtis Loftis speaks at a Statehouse hearing on Wednesday, Jan. 29, 2025, in Columbia, S.C. (AP Photo/Jeffrey Collins)

Grooms, the Berkeley Republican who ran a budget panel focused on the error, told Jackson on March 28 that Loftis broke his statutory duties that included reporting requirements and having "true books."

"Had he abided by the state law that that binds him to his job, that spells out what his duties are, we would not have a $1.8 billion error within our state treasury," Grooms, whose panel released a report with recommends, told Jackson. "Hundreds of millions of dollars of errors is not acceptable. And having those errors within our books for at least the past seven years, while he knew about them, failed to disclose them as a breach of duty. That deserves action.”

What does Loftis say: Loftis has repeatedly denied wrongdoing despite that the outside audit firm said all three state officials had shared responsibility in the error. In a Facebook post late last month, Loftis called the Senate report "inaccurate, misleading and petty." He said his office has "nothing to hide."

Cost to taxpayers: Altogether, Grooms told Jackson that the error has cost taxpayers somewhere around $10 million in hiring the outside audit firm, monitors and attorneys fees to deal with the ongoing SEC investigation. Meanwhile, the state Attorney General's Office, Grooms said, has testified that legal fees are mounting, and next year may be upwards of $15 million.

What's next?

The Senate report recommended that Loftis be removed, a constitutional process that says the governor can remove a statewide officer after a two-thirds vote of each chamber. The officer (in this case Loftis) gets the opportunity to a hearing in his own defense, or by an attorney or both, before any vote.

No constitutional officer has ever been removed in this manner, the report says.

“Usually (you) correct these things at the ballot box, but the Constitution gives this remedy for just this occasion when we have a constitutional officer who has violated his oath, his duties and is now harming the people of our state,” Grooms told Jackson. “I believe there's overwhelming support in the Senate to do this.”

Grooms said expect an announcement of the Senate's plans — likely a joint resolution that calls for impeachment — this week, possibly as soon as Wednesday.

What else we're watching in Week 12

It's officially crunch time in the Statehouse.

Here's what we're watching during Week 12 — minus any surprises.

Starting with the Senate:

  • Now past tort reform, the Senate this week moves onto the debate over energy. More specifically, H. 3309, the House's energy utility bill filed by Speaker Smith. Senate Majority Leader Shane Massey, R-Edgefield, told reporters last week that Tuesday and Wednesday of this week could be long days.
  • At 10 a.m. Tuesday, a special Senate Finance subcommittee will meet on S. 344, the so-called SC Equine Advancement Act filed by Sen. Michael Johnson, R-York.
  • At 9 a.m. Wednesday, a Senate Labor, Commerce and Industry panel will discuss two social media bills related to minors — S. 268 filed by Sen. Sean Bennett, R-Dorchester, and H. 3431 filed by Rep. Weston Newton, R-Beaufort. And, at the same time, a Senate education subcommittee meets on a charter school accountability bill, S. 454, filed by Senate Education Chairman Greg Hembree, R-Horry.
  • At 9 a.m. Thursday, the full Medical Affairs Committee meets for the second confirmation hearing on Dr. Edward Simmer, appointed by Gov. Henry McMaster to run the new public health department. The committee plans to return after session.

Now the House:

  • The House is set to return to debate H. 3927 that in part bans DEI offices and prohibits race and gender from being part of college admissions or hiring decisions. The chamber abruptly stopped debate on the bill last week. Education Chairwoman Shannon Erickson, R-Beaufort, said she wanted to vet 20-plus amendments first.
  • Tuesday afternoon, the full House Judiciary Committee will meet to discuss a handful of bills, including proposals to combat the dissemination of intimate images and a bill that in part would restrict government agencies from having a gun owner registry. And a Labor, Commerce and Industry subcommittee will meet in the afternoon to decide whether H. 3129 regulating personal delivery devices (filed by Rep. Todd Rutherford, D-Richland) and H. 3931 (filed by Rep. William Bailey, R-Horry) that deals with applications for a Coastal Tideland and Wetlands Permit get favorable reports.
  • At 9 a.m. Thursday, the full Medical, Military, Public and Municipal Affairs Committee will decide whether to send S. 2 (filed by Sen. Harvey Peeler, R-Cherokee) that consolidates some health care-related agencies to the floor. At the same time, the House Judiciary General Law Subcommittee will discuss two alcohol-related bills, one by Beaufort Republican Rep. Weston Newton to allow for alcohol delivery and curbside pickup (H. 3857) and another filed by Rep. Mark Smith, R-Beaufort, dealing with Sunday liquor sales (H. 4001).
Dr. Ed Simmer, interim director of the S.C. Dept. of Public Health, testified before the Senate Medical Affairs Committee on March 20, 2025, where he was answering questions as part of his confirmation hearing to lead the newly-formed department.
Provided
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SCETV
Dr. Ed Simmer, interim director of the S.C. Dept. of Public Health, testified before the Senate Medical Affairs Committee on March 20, 2025, where he was answering questions as part of his confirmation hearing to lead the newly-formed department.

Daily planner (4/1)

SC House

SC Senate

SC governor

  • 9 a.m. — Lt. Gov. Pamela Evette to speak at the South Carolina Innovation Awareness Month kickoff breakfast
  • 9:30 a.m. — Gov. Henry McMaster to oversee a State Fiscal Accountability Authority meeting
  • 11 a.m. — Evette to speak at Higher Education Day at the Statehouse

Clips from around the state
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Maayan Schechter
Maayan Schechter (My-yahn Schek-ter) is a news reporter with South Carolina Public Radio and ETV. She worked at South Carolina newspapers for a decade, previously working as a reporter and then editor of The State’s S.C. State House and politics team, and as a reporter at the Aiken Standard and the Greenville News. She grew up in Atlanta, Georgia, and graduated from the University of North Carolina-Asheville in 2013.
See stories by Maayan Schechter
Gavin Jackson
Gavin Jackson graduated with a visual journalism degree from Kent State University in 2008 and has been in the news industry ever since. He has worked at newspapers in Ohio, Louisiana and most recently in South Carolina at the Florence Morning News and Charleston Post and Courier.
See stories by Gavin Jackson
Russ McKinney
Russ McKinney has 30 years of experience in radio news and public affairs. He is a former broadcast news reporter in Spartanburg, Columbia and Atlanta. He served as Press Secretary to former S.C. Governor Dick Riley for two terms, and for 20 years was the chief public affairs officer for the University of South Carolina.
See stories by Russ McKinney