Why Gov. McMaster should veto the raises SC lawmakers voted themselves | Opinion
Editor’s note: My column below on a legislative pay raise was initially inaccurate, and it has been updated.
South Carolina lawmakers’ $18,000 annual pay raise would not increase the pensions of 43 lawmakers grandfathered into a closed pension system, as I had incorrectly reported it would.
I apologize to all my readers and personally to the politicians whose pensions I mistakenly said would rise: Senate President Tom Alexander, Sen. Harvey Peeler, Sen. Darrell Jackson, House Speaker Murrell Smith, Rep. Bruce Bannister and Rep. Leon Stavrinakis.
I based my reporting on a 1992 Attorney General’s Office opinion on lawmaker pay and the potential impact on pensions of a 2014 legislative pay raise that then-Gov. Nikki Haley vetoed. That information was incomplete. The 2014 raise would have increased lawmaker pensions because it defined the extra “in-district expense” as “earnable compensation.” But the 2025 raise does not define the increased in-district expense as earnable compensation and thus does not boost pensions for those in the closed pension system.
The pay raises will, however, increase the pensions for lawmakers elected after 2012 that are enrolled in a different defined-benefit pension system, which pays state employees retirement benefits based on averaging several years of their highest salary. One exception would be if a lawmaker earned a higher salary for years working another state job so it’s unclear how many lawmakers at the State House voted to increase their pay and pension benefits last month.
The General Assembly has 170 seats, so up to 127 may be enrolled in the South Carolina Retirement System if 43 are in the closed system. I’ve asked pension officials for the number.
I still believe Gov. Henry McMaster should veto this pay increase slipped into the state budget late in the process without public input or analysis of the financial impact. The public should have been allowed to comment on the pay raise proposal, lawmakers should have discussed its impact on their pensions, and no raises should take effect until after the next election so as to be less self-serving, as is required by state law for county and city council members’ raises.
But as I sought to better understand and relay to readers the pension impact, I made a mistake.
I am sorry.
The updated column is below.
It was bad enough that the state’s legislators voted themselves an 80% pay raise last week with no public debate, little justification, zero idea of the long-term impact and the inducement that those reluctant to take the money could just use it as slush funds without any rules. Seeing how much their pensions will soar makes it worse.
This was a heist during broad daylight on Wednesday, May 28.
Gov. Henry McMaster should veto the raise this week.
By way of explanation, the state lawmakers’ Cadillac pension plan closed to new members after the 2012 election. The most recent retirement system report shows 43 current lawmakers and a number of retired lawmakers are enrolled in the fund that pays out at a benefit multiplier of 4.82%. None of their pensions will go up. But lawmakers elected after 2012 can enroll in the state’s general employee pension system, where their benefit multiplier is a more modest but still rewarding 1.82%. Their pensions will rise.
It’s unknown how many lawmakers will get higher pensions as a result of the raises they voted themselves. There are 170 seats in the General Assembly, so if 43 are in the closed pension system, as many as 127 could be in the state’s other defined-benefit system. They could also have enrolled in a defined contribution pension system or declined to participate in retirement systems altogether.
Currently, lawmakers get $10,400 in base pay and a $12,000 in-district expense, which count toward their pensionable pay.
There are also five high-ranking lawmakers with other pensionable pay.
Senate President Tom Alexander gets $11,000 a year for the large workload of leading the 46-member Senate and House Speaker Murrell Smith gets an extra $11,000 to lead the 124-member state House of Representatives. House Speaker Pro Tempore Tommy Pope, House Ways and Means Committee Chairman Bruce Bannister and Senate Finance Committee Chairman (and former Senate President) Harvey Peeler get sums of their own for their additional roles and responsibilities, according to a list of positions entitled to extra pay in the General Assembly Retirement System Member Handbook.
Rep. Pope gets an extra $3,600 a year, but next year’s state budget doesn’t list what Rep. Bannister and Sen. Peeler would get as chairs. Yet whatever they got would count toward their pensions, per a 1992 state Attorney’s General Office opinion and as also explained by the South Carolina Public Employee Benefit Authority: Pensions factor in such “additional line-item compensation.”
I’m throwing a lot of numbers at you, so I’ll just give you a few more while putting all this in perspective as I illustrate one of the most stunning things about this: how it came to be.
How this came to be
State lawmakers have earned the same pay since the 1990s.
They get $10,400 in annual base pay, unchanged since 1990, and $12,000 a year for in-district expenses, unchanged since 1995, on top of mileage reimbursement and a $231 per diem.
Then-Gov. Nikki Haley vetoed a move to double in-district pay to $24,000 in 2014. She said at the time she faulted the way it was done.
McMaster should use the same logic to veto this raise.
Lawmakers who want to justify higher pay for greater responsibilities and busier schedules than those of decades ago can do so next legislative session — in public hearings, with reports that detail the overall effect on pay and pension, and in such a way that would delay any raise until after the next election to not be self-serving.
Instead, lawmakers voted overwhelmingly to boost their annual in-district expense allowances from $12,000 to $30,000, starting with the new state budget July 1. Combined with their $10,400 base pay, their annual pay will soar from $22,400 to $40,400, an 80% increase.
When a handful of legislators criticized the rushed, self-serving process and a few suggested lawmakers should delay any increase until after the next election so voters could weigh the fate of the incumbents who supported it, Rep. Bannister, the chairman of the House Ways and Means Committee, said the higher compensation was “not a pay raise. It’s an expense reimbursement.”
He’s wrong, of course. In theory, that money is meant to be spent on working in and traveling around one’s district, but lawmakers can spend it on anything, without any restrictions at all, and they receive it without having to document any expenses.
As Rep. April Cromer told Bannister before the final vote, it’s also taxed as income.
It’s pay, pure and simple. More of it is a pay raise. And whose money is it? The taxpayers’.
Wasn’t mentioned
For months, it seemed like the current crop of lawmakers didn’t want to deal with the trickier consequences of voting themselves a pay increase and then having to defend it in their next election against an opponent who might call them out for enriching themselves as they had.
The House rejected a comparable pay raise in March on a 91-15 vote that seemed to end discussion.
Yet Alexander’s Senate resurrected the idea and tucked it into its version of the budget on April 23, after only 30 seconds of brief explanation. The 24-15 vote was so close that it would have failed if five “yes” votes had instead been “no.” Notably, Sens. Alexander and Peeler voted “no.”
Then on May 21, a six-member committee that included Sens. Alexander, Peeler and Darrell Jackson — three of the longest-serving senators — and Reps. Leon Stavrinakis, Lee Hewitt and Bannister voted unanimously and just as quickly — in less than a minute — to keep the $3 million of extra lawmaker pay in South Carolina’s $14.7 billion general fund budget.
Just like that, the budget returned to the Senate and the House for a pair of up-or-down votes, with political cover to say lawmakers needed to pass it despite any reservations about raises.
In the Senate, only Sen. Wes Climer spoke out against the raises before Alexander called for a final vote as Senate president. In the House, Speaker Murrell Smith presided over the discussion, and only a handful of lawmakers blasted the process. The word pension wasn’t mentioned once at any of the four meetings about including raises in the budget.
How literally rich
After reading this, maybe you will agree that this particular vote was not in the public’s interest. Go online, and you can see for yourselves who voted yes and no on the budget that included the pay raises in the House and the Senate and decide — again, for yourselves — whether this will influence your vote in the next election.
As I’ve suggested, there’s an argument to be made in support of paying state lawmakers more. But the members of the state’s 126th General Assembly, who don’t face re-election until 2026 at the earliest, need to make that argument openly and fully, not to try to avoid it altogether while voting in raises that take effect before the next two-year General Assembly starts work in 2027 after those 2026 elections.
If McMaster chooses not to veto this pay and pension hike when signing the budget this week, only a potential lawsuit could stop this smuggling of taxpayer dollars out of the State House.
There is a line in Article III Section 19 of the state Constitution that reads, “no General Assembly shall have the power to increase the per diem of its own members.” Does that mean a legal challenge to a mid-term increase of “in-district expenses” could succeed? We may find out.
In criticizing the pay raise last week, Sen. Climer called it unconstitutional and said he had talked to lawyer and former state Sen. Dick Harpootlian about suing the state. Harpootlian would not say much more when asked about it, but any constitutional challenge seems like it would be rooted in the “per diem” language.
It also may be a long shot. Isn’t an in-district expense different than a per diem, which lawmakers also get?
Another legal challenge could involve state code 8-13-700, which says a public official may not “knowingly use his official office, membership, or employment to obtain an economic interest for himself, a family member, an individual with whom he is associated, or a business with which he is associated.” Does this raise run afoul of that? Would a lawsuit’s legal discovery unearth anything to show it?
Then there’s this: State law prohibits members of county councils and city councils — and by extension school boards, according to the State Ethics Commission — from giving themselves mid-term raises before the next election. State lawmakers thought that would be too self-serving, so they passed laws banning such action for others!
How literally rich.
It’s self-evident they jettisoned that logic for their own self-enrichment.
Help us, Gov. McMaster. You might be our only hope.
This story was originally published June 2, 2025 at 5:00 AM.