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The Top 5 issues Henry McMaster would face as SC governor

Moving into the South Carolina governor’s mansion means Henry McMaster would inherit the Palmetto State’s most pressing issues, among them responding to a school equity lawsuit and repairing the state’s crumbling roads and bridges.

The lieutenant governor is expected to replace Gov. Nikki Haley if she is confirmed by the U.S. Senate to be President-elect Donald Trump’s ambassador to the United Nations.

McMaster’s stances on the top issues are not as well known as Haley’s. And for now, he’s not taking questions, staying quiet since Haley’s nomination was announced on Wednesday.

Still, it’s certain he’ll face the usual decisions of what takes priority as he works with the General Assembly on how to spend money. And the demands on the state’s pocketbook seem to be particularly acute right now.

Here are, arguably, the top five most pressing things South Carolina’s next governor faces.

Schools

This year, lawmakers approved spending $430 million more in general fund dollars on education than nine years ago, before the Great Recession.

But the state is spending only slightly higher in inflation-adjusted dollars than before the Great Recession, and is educating 6 percent more students than before the recession.

Haley pushed lawmakers to spend more on education in recent years on reading coaches, technology and students in poverty. But this year, legislators failed to pass Haley’s proposal – the first of its kind in nearly two decades – to spend state money to help poor districts build and renovate schools.

For decades, districts have had to raise money locally to upgrade facilities – leaving wealthier districts with strong tax bases with a huge advantage over poorer ones.

McMaster likely will have a role in how the state responds to the Abbeville lawsuit.

State Sen. John Courson, R-Richland, who has chaired the state Senate education committee in the past, said education is the state’s No. 1 issue.

“The governor, being the chief executive officer of the state, will be engaged heavily” in education policies and spending, Courson said.

Roads

South Carolina’s roads continue to crumble.

In part, that’s because lawmakers have not increased the state’s 16.75 cent-a-gallon gas tax, the second-lowest in the nation, in nearly 30 years. That money is one of the state’s primary funding sources for repairs.

After winning re-election in 2014, Haley endorsed a 10-cent gas tax increase only if it were paired with a much larger income tax cut. Critics of her plan argue such a tax break would raid the state’s budget and force South Carolina to cut services.

Whether McMaster would sign a proposal increasing the state’s gas tax remains to be seen. If he approved a tax hike of any kind, it could be used against him in a GOP primary, should he seek re-election.

However, road-repair advocates hope he will approve spending more money to improve the state’s roads and bridges.

“We’re very hopeful, certainly, that governor-to-be McMaster will be looking closely at the highway funding road issue that’s been before the Legislature now for a number of years,” said Bill Ross of the S.C. Alliance to Fix Our Roads.

State budget

Disasters have struck the Palmetto State two years in a row.

First, a historically heavy rainfall caused flooding across the Midlands and the coast in October 2015, killing 19 people. That flooding cost taxpayers about $150 million, including $40 million for grants to farmers whose crops were damaged.

This year, Hurricane Matthew brushed the S.C. coast, causing damage and additional flooding, particularly in Beaufort, Horry and Georgetown counties and parts of the Pee Dee.

However, lawmakers will have only about a third of the added money they had last year. That means any money spent to pay for disaster relief will quickly cut into money to pay for other expenses.

State budget writers also will grapple with how to pay for programs at state agencies and overdue maintenance at state government buildings, including on college campuses.

State employees

The Great Recession forced cuts across state government, eliminating many employees’ jobs. In addition, S.C. state workers received no pay increases during four of the past 10 budget years.

However, lawmakers in the spring passed a 3.25 percent pay raise, the largest in a decade.

That raise increased the pay of about 61,000 state employees, about 21,000 of whom work in Richland County, according to the state Department of Administration.

McMaster is from Columbia, where many state employees live, which could give him reason to support more money for state workers.

Pension

Like governments across the country, South Carolina has a pension problem, and the bulk of the Baby Boomers have yet to retire.

A joint panel of S.C. House members and senators have begun reviewing how to address the state’s roughly $20 billion in pension debt.

That estimate, by consultants for the state, is the difference between the amount the pension fund has to pay for the retirement benefits of state and local government workers, including teachers, and the amount it has promised to pay in the future to current employees and retirees.

To close that gap, lawmakers are looking at whether to spend more taxpayer money or take more money from the paychecks of current workers.

Lawmakers also could close the pension plan to new employees and require them to take part in a defined contribution plan, like a 401(k) investment plan. In the short term, that would increase the pension system’s unfunded liability because new workers would not be paying into the system. But, in the long term, it would reduce the state’s pension costs.

Whether McMaster will favor one solution over another remains to be seen.

Cassie Cope: 803-771-8657, @cassielcope

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