Three Things to Know: June 16

This week's information compiled by your SC Chamber team includes: 
Governor Establishes PowerSC, Inflation Declines - Fed Holds Interest Rates Steady, Legislative Update

 1. Governor Establishes PowerSC

Last week, Governor Henry McMaster issued an executive order to create the PowerSC Energy Resources and Economic Development Interagency Working Group (PowerSC) which will be responsible for working with the state’s energy stakeholders to ensure South Carolina has the energy capacity it needs for the future as the Palmetto State continues its record economic and population growth. Responsibilities for PowerSC will include working with the Office of Regulatory Staff (ORS) to develop an updated state energy plan, evaluating opportunities to enhance natural gas consumption or generation and to incorporate additional nuclear power production, and working with stakeholders to develop solutions to improve the state’s permitting processes as it relates to energy infrastructure.

In a press release, Gov. McMaster noted “South Carolina has enjoyed unprecedented economic success and population growth in recent years, and with that success comes a need for greater energy generation. By establishing PowerSC, we ensure that South Carolina can meet these increased energy demands while also keeping energy costs low for consumers and ratepayers.”

PowerSC will consist of delegates from the S.C. Department of Commerce, ORS, the Governor’s Office, S.C. Department of Health and Environmental Control (DHEC), S.C. Department of Transportation (DOT), S.C. Department of Natural Resources (DNR), S.C. Department of Employment and Workforce (DEW), and the S.C. Department of Labor, Licensing and Regulation (LLR).

2. Inflation Declines, Fed Holds Interest Rates Steady 

The latest Consumer Price Index (CPI) Report shows that inflation remains elevated, but fell in May to around half last year’s peak marking the 11th straight month of inflation declines. This data shows that the Federal Reserve has made progress in their efforts to lower price pressures, but more action still needs to be taken. Sarah House, senior economist at Wells Fargo, stated that “directional progress should not be confused with mission accomplished.” The main categories that saw rising costs and drove inflation last month were housing, used vehicles, and food. However, gasoline and other energy prices decreased from April.

In May, the Federal Reserve raised its benchmark interest rate to between 5% and 5.25%, which is the highest level in 16 years. During a meeting this week, Federal Reserve leaders decided to hold rates steady after 10 straight months of hikes. However, Federal Reserve Chair Jerome Powell hinted that they could raise rates again next month if inflation doesn’t cool even more. Despite inflation concerns the U.S. economy has maintained momentum, warding off predictions of a recession. The nation has continued to have a strong job market and there has been an increase in consumer spending.

3. Legislative Update

Members of the House and Senate returned to Columbia this week to adopt conference reports and send them to the Governor’s desk for his approval. Notable issues taken up this week include:

• FY2023-24 Budget (H.4300) – On Wednesday, both the House and Senate overwhelmingly adopted last week’s budget conference report and sent the final $13.8 billion package to Governor Henry McMaster’s desk for his signature or for any line-item vetoes. Upon the Governor’s signature, the new budget will go into effect July 1, 2023. The SC Chamber greatly appreciates the FY2023-24 budget’s focus on lowering taxes, investing in workforce training initiatives, enhancing teacher recruitment and retention, and investing in our state’s infrastructure. Stay tuned for a deep-dive into the FY2023-24 budget in next week’s Three Things to Know.
• First Steps to School Readiness Reform & Reauthorization (H.4023) – On Wednesday, the House and Senate both approved a bill that will permanently reauthorize the South Carolina First Steps to School Readiness Act and makes changes to the composition of the First Steps to School Readiness Board of Trustees, giving greater deference to local communities. The bill also requires the First Steps Advisory Council to develop and oversee the collection of data for public early childhood education and development programs offered throughout the state and to prepare an overall strategic plan that establishes clearly defined goals, objectives, strategies, and key measures of progress for optimizing the state's early childhood system. The bill now heads to the Governor’s desk. First Steps is a comprehensive early childhood initiative focused on preparing children to transition from kindergarten into school, and the SC Chamber has long supported permanent reauthorization.
• Bond Reform (H.3532) – On Wednesday, the House and Senate ultimately agreed to a compromise bill aimed towards closing the “revolving door” for repeat criminals by reforming the state’s bond system. The bill creates a new penalty enhancement of up to five years that solicitors may pursue for individuals convicted of a violent crime while out on bond for a previous violent crime. It also immediately revokes bond for an individual charged with a violent crime or a felony offense involving a firearm while out on bond for a similar previous crime and requires defendants who are charged with a third violent crime while out on bond for two previous and unrelated alleged violent crimes to pay the full amount of bail in cash without using a bondsman. Additionally, the bill makes significant changes to the electronic monitoring of defendants out on bond by requiring monitoring agencies to notify law enforcement within two hours if a monitoring system (i.e., an ankle bracelet, etc.) has been tampered with by a defendant. The bill now heads to the Governor’s desk for his signature.
• Malicious Injury to Public Utilities (S.330) – On Wednesday, the House and Senate both approved a bill that creates criminal penalties for individuals who maliciously destroy, damage, or injure an electric utility system with a firearm or other destructive device. The bill now heads to the Governor’s desk for his signature.

Both the House and Senate adjourned to the call of the Speaker of the House and the President of the Senate respectively, and, barring a return to address any Gubernatorial vetoes, are likely finished with their work until January 2024.