The 2027 South Carolina Responsible Budget

This report was originally published at South Carolina Policy Council. 

South Carolina enters Fiscal Year 2027 with strong economic momentum but growing fiscal risk. Payroll employment expanded by 3.1 percent year over year, while the unemployment rate edged up to 4.3 percent in August 2025, according to the U.S. Bureau of Labor Statistics. The labor market remains among the most dynamic in the Southeast, supported by migration inflows and diversified job growth in professional services, health care, and hospitality, as detailed in the Richmond Fed’s South Carolina Economic Snapshot.
Behind this strength, however, the state budget tells a different story. Over the past decade, recurring spending has outpaced population growth plus inflation. The Americans for Tax Reform’s Sustainable Budget Project estimates that in 2024, South Carolina’s state-fund expenditures exceeded population growth plus inflation by $6.8 billion and all-fund spending by $9.9 billion—nearly $36 billion in cumulative overspending since 2015.

This report outlines the FY 2027 South Carolina Responsible Budget (SCRB): a framework combining a Responsible Spending Limit (RSL) tied to less than population growth plus inflation and a surplus-trigger buydown that automatically channels certified surpluses into lowering personal income taxes. Drawing from SCPC’s Path to Prosperity roadmap, ATR’s Sustainable Budget Project, and Club for Growth Foundation’s analysis in the Sustainable Budgeting Blueprint, the SCRB presents a credible path to eliminating South Carolina’s income tax. 
Polling by the South Carolina Policy Council shows that 74 percent of voters support income-tax elimination and 68 percent favor a spending cap based on population growth plus inflation. Both of these policy positions have majority support among Republicans, Democrats , and Independents. The economic conditions, public mandate, and policy tools now align. The South Carolina Responsible Budget provides the blueprint to translate this moment into lasting prosperity.

Read the full report below. 

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