26 Jan 2022

South Carolina Gov. Henry McMaster delivers State of the State address

Last Wednesday, South Carolina Gov. Henry McMaster delivered his State of the State address, outlining his administration’s accomplishments in the last year, and sharing his vision for the Palmetto State in 2022.

Economic Recovery

As the national economy continues an uneven recovery from the pandemic, positive developments can be found in South Carolina. McMaster highlighted the 15,000 new jobs created and $4.3 billion in new capital investment made in the state over the past 12 months. The state GDP has increased 10% during the pandemic, and the unemployment rate remains below the national average. McMaster mentioned several significant economic development projects in the state, including the E. & J. Gallo Winery facility being built in Chester County.

McMaster has opposed Covid-19 vaccine mandates and applauded the U.S. Supreme Court’s recent decision striking down a federal directive requiring large private employers to enforce a vaccine or testing program. The governor viewed the mandate as an unjust and unlawful overreach by the federal government, adversely impacting workers and businesses across the state as the economic recovery continues.

Competitiveness

Related to the economic recovery from the pandemic, McMaster touched on competitiveness issues in his address.

“We know that the competition for jobs and investment is fierce, both nationally and globally,” he said. “We cannot be complacent. We must act. We must make big, bold, and transformative investments in the areas of education, infrastructure, workforce, and economic development to strengthen the foundations of our prosperity for generations to come.”

McMaster reminded the General Assembly and others listening in that he has proposed a 1% cut to the personal income tax rate for the fourth straight year. His support for this policy position is that South Carolina has the highest marginal income tax rate in the southeast, at 7%, a disincentive to attracting a talented workforce to the state.

Infrastructure

Like many places in the country, South Carolina needs improvements to its transportation infrastructure. Before his State of the State address, McMaster called for more than $1 billion in investment in transportation infrastructure in his executive budget, and reiterated his call last week.

“There is no infrastructure more in need of big, bold, and transformative one-time investments than our state’s roads, bridges, highways, and interstates,” McMaster said. “Our booming economy and rapid population growth have outpaced the State’s ability to keep up with improvements to our transportation infrastructure.”

The governor also called for significant investment in broadband expansion – totaling $400 million in federal funds.

“In recent years, facilitating access to broadband connectivity has become a top priority for South Carolina,” McMaster said. “From health care to education, more people are working or learning from home. Quality internet service has quickly become a necessity for the prosperity of our state and people.”

Education

Recognizing the critical role teachers play in educating students, McMaster proposed raising the minimum salary for a starting teacher from $36,000 to $38,000. The governor is also seeking to revamp the school funding formula, aiming to increase accountability and improve student outcomes.

Workforce

Understanding the great need employers have for qualified workers, McMaster is seeking to upskill the state’s workforce.

“I am requesting that the General Assembly invest $124 million to expand Workforce Scholarships for the Future, a program that allows residents to earn an industry credential or an associate degree in high-demand careers.” McMaster said. “Careers in manufacturing, healthcare, science, information technology, transportation, logistics, or construction.”

Many of the governor’s proposals will require action by the South Carolina General Assembly. The legislative session runs through mid-May, and the CLT Alliance will continue to work with the legislative and executive branches on securing positive outcomes for the business community.

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