Three Things to Know: May 23rd

This week's information compiled by your SC Chamber team includes: 
Conference Committee Advances State Spending Plan, U.S. House Advances "One Big Beautiful Bill", S.C. Sees Faster Job Growth Than Rest of Country

 1. Conference Committee Advances State Spending Plan

House and Senate budget conferees returned to the State House this week to finalize the state’s spending plan for FY2025-26. Prior to their return, the state’s Board of Economic Advisors (BEA) issued a revised revenue forecast for FY2025 and FY2026, giving budget writers an additional $1 billion in revenue to appropriate. Thanks to stronger-than-expected corporate and individual income tax collections and sales tax collections, one-time nonrecurring revenue increased by $669 million and recurring revenue increased by $377 million.

After two days of deliberations and working through the differences in each body’s spending plan, the conferees advanced a final $14.7 billion spending plan (H.4025) that includes notable items like:

• $290 million for additional individual income tax relief, reducing the top rate to 6%. 
• $200 million to the Department of Transportation (SCDOT) for bridge infrastructure projects across the state.  
• $130 million to increase the manufacturing property tax exemption cap enacted in the Comprehensive Tax Cut Act of 2022 to hold the effective manufacturing property tax rate at 6% and ensure small to mid-size manufacturers do not experience a property tax. 
• $112 million to raise teacher salaries and increase starting teacher pay from $47,000 to $48,500. 
• $91 million for technical college scholarships for critical needs jobs through the SC Workforce Industry Needs Scholarship Program (SCWINS).  
• $81 million to the Department of Commerce for industrial site readiness. 
• $15 million for rural water and sewer infrastructure projects. 
• $15 million to the Department of Employment and Workforce (DEW) for the Find Your Future portal.
• $840,000 to the Department of Environmental Services (DES) for energy infrastructure permitting and a proviso requiring decisions on DES permit applications within 90 days. 

Both the House and Senate will return next Wednesday to vote on the conference committee’s version of the FY2025-26 budget.

2. U.S. House Advances "One Big Beautiful Bill"

Following multiple days of deliberations and negotiations, the U.S. House of Representatives passed its major reconciliation package, dubbed the “One Big Beautiful Bill Act”, Thursday morning by a narrow vote of 215-214-1 with all House Democrats voting no. As we reported last week, the package contains several business priorities, including:

• Permanently extending provisions of the 2017 Tax Cuts and Jobs Act (TCJA) that were set to expire at the end of this year.
• Maintaining the 21% corporate tax rate.
• Expanding and making permanent the 199A small business deduction to 23%, increasing the amount of business income business owners with sole proprietorships, partnerships, and S-corporations can deduct from their federal returns.
• Renewing 100% immediate expensing for domestic research and development (R&D) expenses.
• Restoring 100% bonus depreciation on capital investments.
• Reducing the paperwork burden for small businesses and workers by increasing the 1099-MISC threshold to $2,000.

Notable compromises and revisions to the final package were made over the past week, including many that received significant media attention, like:

• An increase in the State and Local Tax (SALT) deduction cap to $40,000 for people making under $500,000.
• The rollback of clean energy tax incentives from the Inflation Reduction Act, including the electric vehicle (EV) tax credit.
  • To claim clean energy investment and production tax credits, projects will have to “commence construction” within 60 days of the bill’s enactment and be placed in service by the end of 2028.
• Requiring able-bodied Medicaid recipients with no dependents to work, volunteer, or pursue education for at least 80 hours per month effective Dec. 31, 2026.

The bill now heads to the U.S. Senate, where significant revisions are expected.

3. S.C. Sees Faster Job Growth Than Rest of Country

South Carolina experienced the second-highest percentage change in the number of individuals employed and working (2.4 percent) from March 2024 to March 2025, trailing only Idaho according to data released last month by the Bureau of Labor Statistics (BLS). The total number of South Carolinians working increased by 55,000 year-over-year to over 2.4 million individuals. Only five states, with larger populations, saw a higher total increase.

The industries that saw the largest growth were Construction, Education and Health Services, and Financial Services. 20 percent of the state’s workforce is employed within the state’s trade, transportation, and utilities “supersector”.

According to the South Carolina Department of Employment and Workforce (SCDEW), this data “…suggests that jobs are abundant in South Carolina. Widespread growth of opportunities for workers has facilitated rapid entry into the labor force, a signal of the state’s economic strength.”