We need a codified earmarks process to protect S.C. taxpayers

By now, the budgetary dust has settled across the state, as the S.C. Legislature passed a general appropriations act and a supplemental appropriations act for this fiscal year allocating an additional $351 million to lawmakers’ pet projects, also known as earmarks. 

An earmark typically is a budget request made by a legislator later in the budget cycle rather than a state agency at the start of the process. Some earmarks are good, such as, for example, providing additional firetrucks to a local government. 

But other earmarks are essentially taxpayer-funded donations to nonprofit organizations – which clearly is a step beyond the legitimate role of government, though the nonprofits themselves usually have worthy purposes. 

This is not to say that we can definitively say which earmarks are and are not legitimate. Aside from nonprofits, I am sure that some of the $350 million will be spent by communities that could really use the help. 

The point is that the process itself is not transparent and needs to be codified into law by state lawmakers. 

In May, The Nerve – the investigative arm of the South Carolina Policy Council – revealed that the 170-member General Assembly collectively had proposed 175 earmarks totaling as much as $467 million, though the Senate’s earmark list wasn’t posted then on the Legislature’s website, and that neither chamber’s publicly available list contained details of their respective projects.  

In June, The Nerve revealed that the House’s top administrator had declined a formal request under the state’s open-records law for its internal earmark forms submitted by House members requesting earmarks.  

On Aug. 25, the House approved the compromise $350 million earmarks bill by a 96-15 vote, while Senate earlier on the same day voted 30-6 to pass it. Gov. Henry McMaster signed it into law on Sept. 1. The 2026-27 fiscal year started July 1. 

One thing can be made certain from this whole ordeal: This is not the way the appropriations process should work. 

Typically in recent years, other than last years pause on earmarks, earmark wish lists have grown far larger later in the budget process with rosier year-end, general-fund revenue projections. 

All in all, the process has been problematic, drawing ire from policy professionals, legislative commentators, media and even some lawmakers. 

So this shouldn't happen again. The question is: How we avoid this in the future? 

It seems straightforward enough: The state must codify a transparent earmarks process, given, as The Nerve pointed out in its May story, although there are House and Senate rules dealing with earmark requests, there currently is no state law requiring earmark transparency during the budget process. 

What that earmark process should look like is an open question. 

After budget negotiations initially stalled Senate and House members on a six-member conference committee eventually agreed to remove all earmarks directing state funds to nonprofits. 

But if this process would have taken place earlier and publicly, many of those earmarks might not have been proposed because on their face they are clearly beyond the mandate of a core government function. 

Should the state bail out localities? 

There is another more basic question about earmarks that should be asked early on in the budget process: Why should state taxpayers pay for these projects in the first place? 

For example, if a municipality wants to revitalize its downtown, why should taxpayers across South Carolina be responsible for paying for it? If a town or city believes a project is important enough to pursue, there is a reasonable argument that the locality should be responsible for raising the revenue necessary to complete it. 

This is not to say that local governments should never receive state funding. In fact, counties and municipalities collectively receive hundreds of millions in state dollars annually, based on a per-capita formula, to offset local property tax burdens and fund basic services. 

There are legitimate reasons for the state to provide funding to local governments. But there should be a clear reason why a project is a state responsibility rather than simply something a local government wants to do. 

This question becomes even more important when you consider the fiscal pressures facing the federal government. Federal funding is not going to be available forever at its current levels. At some point, states will likely be asked to pick up some of the costs currently covered by federal dollars. 

When that happens, South Carolina will have to make difficult choices about where its limited resources should go. Those choices should prioritize core government responsibilities rather than, for example, spending hundreds of millions of dollars revitalizing individual municipalities simply because the state lawmakers representing those communities have an affinity for a particular project. 

SCPC’s proposal for earmark reform 

In general, a codified earmark process needs to answer a few simple questions: 

Where are my tax dollars going? Who wants them to go there? Why do they need my tax dollars? Why should the state fund this project rather than localities?  

So, what should that process actually look like? 

A new state law should require that earmarks be requested in writing to the House or Senate budget chairmen. At a minimum, each request should include the following information: 

The new law should mandate that these requests should then be posted to the Statehouse website within 24 hours of the request being submitted to the budget chairman. And it shouldn’t be a difficult task; simply upload and revise as needed for a more detailed spreadsheet. 

Currently, there is a significant delay between when earmarks are requested and posted online, and the earmark forms lack important details. For example, it's impossible for S.C. citizens to sufficiently scrutinize spending when the description of an earmark simply says, “Revitalization.” This term, with no other description other than the word “downtown,” appears in this fiscal year’s earmark requests at least 10 times. 

Finally, state law must provide strict rules for what types of local projects can be funded with earmarks. We believe earmarks should never be issued to any nonprofit – and especially to any organization whose governing board includes a legislator or a legislator’s immediate family member. 

Additionally, if nonprofits are not outright banned from receiving earmarks, the state must require that all private earmark recipients be properly registered with the Secretary of State’s Office. 

South Carolinians deserve to see where their tax dollars are going and who is asking for them. We encourage state lawmakers to adopt a codified statutory earmark process including this criteria, and we will work with any lawmaker on the issue.