South Carolina · H.5126 / R276 budget

SC's 2026-27 state budget (H.5126): passed in August, 14 line-item vetoes including the Scout Motors payment proviso

Line-item vetoes Aug. 17, 2026

Published October 18, 2026 · Last updated October 18, 2026

What happened

H.5126 is the General Appropriations Act for the fiscal year beginning July 1, 2026. The House and Senate adopted the conference report on August 11, 2026 (House 100–17; Senate 37–2), and it was ratified that day as R276. On August 17, 2026, the Governor vetoed certain items. (Bill 5126, status and history)

Because the fiscal year began without a budget in effect, a joint resolution passed in May let the state keep paying recurring expenses at the level of the prior budget (Act 69 of 2025), plus debt service and other constitutionally required amounts, until the new budget took effect. (S.769, Act No. 262, Section 1)

The 14 vetoes

From the Governor’s veto message: (Veto message, Aug. 17, 2026)

1. Youth Challenge Program, $800,000 (Adjutant General’s Office). The message says the S.C. Youth Challenge Academy graduated its final class June 9, 2026 and will not operate in Fiscal Year 2026–27.
2. Charter school management organizations (Proviso 1.79),
3. charter authorizer fees (Proviso 1.107), and
4. charter authorizer contracts (Proviso 1.111). The Governor said Act 123 of 2026, in effect May 15, 2026, already strengthened charter school transparency and accountability.
5. Student physical privacy (Proviso 1.108), on restrooms, changing facilities and overnight lodging by sex. The Governor said Act 152 of 2026, the S.C. Student Physical Privacy Act, took effect May 15, 2026, so the proviso is no longer needed.
6. Assessments and final grades (Proviso 1.110). The Governor said Act 204 of 2026, in effect July 1, 2026, already covers benchmark tests in final grades. (See our explainer on Act 204.)
7. STEM Centers SC (Proviso 1A.34), covered by Act 142 of 2026, the S.C. STEM Opportunity Act.
8. Educator preparation data system (Proviso 1A.53) and
9. high-dosage tutoring (Proviso 1A.69). The Governor said the money previously appropriated for both had been spent.
10. Town of Pacolet grant forgiveness (Proviso 40.12). The message says Pacolet received a $350,000 Senior Center Permanent Improvement Grant in 2013, the project was not completed, and forgiving it would set “a bad precedent.”
11. Flood planning and warning solution exemption (Proviso 92D.6, paragraph B). The Governor said AI projects must be coordinated through the state’s AI Center of Excellence.
12. Scout Motors site cost review, paragraph F (Proviso 117.207). Paragraph F said no funds could be spent on the $150 million request until a Legislative Audit Council report was delivered and the General Assembly passed separate legislation approving the spending. The Governor wrote: “For work that has been done, the bills should be paid now.” Only paragraph F was vetoed.
13. Authorizations for excess expenditures (Proviso 117.226), which would have barred agencies from spending more than appropriated or increasing contract costs without express legislative approval. The Governor said he supports transparency but the proviso “may create unintended consequences,” such as on construction change orders.
14. ARPA reauthorizations (Proviso 118.18), which the Governor said conflicts with Proviso 118.25 in the same budget.

Who it affects

• Everyone who uses state services, from schools to roads, since the act funds state government for the year. (H.5126, title)
• Contractors and vendors at the Scout Motors site in Blythewood, and the Departments of Natural Resources and Transportation, which the Governor says receive excess debt service funds for site mitigation and road work. (Veto message, Veto 12)

What the Governor says the budget includes

These are the Governor’s descriptions in his veto message and news release; we have not separately checked each figure against the appropriations tables. (Veto message; Governor’s news release, Aug. 17, 2026)

• A minimum starting teacher salary of $50,500 this school year, and a $2,000 increase at every step of the teacher salary schedule.
• An increase in the homestead exemption for homeowners 65 or older, totally and permanently disabled, or legally blind, from $50,000 to $75,000.
• A seventh straight in-state tuition freeze at public colleges; $80 million in lottery money for need-based grants; $20 million for S.C. Tuition Grants; and $18.7 million for a new Meeting Street Scholarship Fund.
• $95 million for SC WINS scholarships at technical colleges, $377 million more for roads and bridges, $88 million for conservation, and $8.3 million for state law enforcement pay, overtime and hiring.
• Funding for the Education Scholarship Trust Fund for up to 15,000 students, and expanded full-day 4K in private providers for families at or below 300% of federal poverty guidelines.

Cost and impact

The full appropriations are in Part IA (funding) and Part IB (provisos) of the ratified act, linked from the bill page. (Bill 5126, versions) The largest dollar veto named in the message is the $800,000 Youth Challenge appropriation; the Scout Motors veto does not appropriate money but removes the condition on spending toward the $150 million request. (Veto message, Vetoes 1 and 12)

Current status

The bill page shows “Certain items vetoed” on August 17, 2026, and lists legislative veto action as “Pending.” (Bill 5126, status) The General Assembly can override a line-item veto with a two-thirds vote of each chamber. (S.C. Constitution, Art. IV, § 21)

Sources

• SC Legislature: 2025-2026 Bill 5126, status, history and budget documents
• Governor’s veto message on R-276, H.5126 (PDF, Aug. 17, 2026)
• Office of the Governor: “Governor Henry McMaster Announces Line Item Vetoes for FY 2026-2027 State Budget” (Aug. 17, 2026)
• SC Legislature: S.769 continuing resolution (Act No. 262)
• S.C. Constitution, Article IV (Section 21, vetoes and line-item vetoes) (PDF)
• WJCL: “McMaster touts South Carolina budget while defending key vetoes” (Aug. 17, 2026)

Every statement above is drawn from the official source text linked here; section references are shown in grey. This is a plain-English summary, not legal advice. Spot an error? Tell us.