Common Sense Tax Reform: Four Principles for South Carolina A citizen-proposed strategic plan offered for consideration by the South Carolina Senate Finance Committee's Subcommittee on Common Sense Tax Reform, embodying four principles: ^^ (1) rebalancing the tax mix toward consumption rather than income; ^^ (2) funding infrastructure through user fees such as automated tolling; ^^ (3) empowering taxpayers to directly control discretionary tax exemptions and credits through their own tax returns; and ^^ (4) ensuring tax policy adapts continuously to technological change. The drafting of this plan was prompted by an invitation from Senator Tom Davis to provide input: https://mailchi.mp/e09c199460a7/prekeduoutcomes-5713836?e=b1a68dac6d ^^ For context, the Governor's FY2026-27 Executive Budget recommendation totaled approximately $42.8 billion, split roughly evenly among General Funds ($14.04 billion, state taxes), Federal Funds ($14.06 billion), and Other Funds ($14.66 billion, dedicated fees and trust funds). ^^ This plan's four goals address different portions of that total: ^^ Goal 1 concerns the composition of General Fund tax revenue; ^^ Goal 2 concerns transportation and other services funded from dedicated Other Funds; ^^ Goal 3 concerns General Fund tax expenditures and the more limited portion of General Fund spending not already committed by formula or federal matching requirements; and ^^ Goal 4 concerns the ongoing need to adapt all of the foregoing to technological change. ^^ The plan does not address Medicaid and other Health and Social Services spending ($3.82 billion General Fund; $8.9 billion total program including federal match), K-12 Education ($4.70 billion General Fund), Higher Education ($1.61 billion General Fund), Public Safety and Criminal Justice ($1.65 billion General Fund), or the Federal Funds that constitute roughly a third of the state's total budget. ^^ Submitter's Note: This plan was compiled and refined in dialog with multiple AI assistants, including Claude.ai, ChatGPT, and Grok. It has been edited in the form at https://stratml.us/forms/Claude/Part2.html Owen Douglas Ambur ODA _f600ab3b-c2c1-4bbd-add0-004009490e42 A South Carolina voter residing on Hilton Head Island, in Senator Davis' district. South Carolina Taxpayers Individuals and businesses who bear the state's tax burden through income, sales, and property taxes. South Carolina General Assembly The body responsible for enacting any resulting tax and budget legislation. South Carolina Department of Revenue The agency responsible for administering the state tax code, including any new taxpayer-directed or usage-based mechanisms. Tom Davis South Carolina State Senator South Carolina Department of Transportation The agency responsible for highways, bridges, and the motor-fuel user fee system that Objective 2.1 would ultimately replace or reallocate through statewide usage-based tolling. South Carolina Revenue and Fiscal Affairs Office The agency responsible for official revenue estimates, fiscal impact scoring, and the multi-year revenue-neutrality calculations required under Objective 1.3. A South Carolina tax system that is fair, transparent, and adaptable: one that taxes spending rather than earning wherever practical, funds infrastructure through the people who use it, gives taxpayers direct say over discretionary tax expenditures, and continuously adjusts to technological and economic change. _d8b33540-f8f4-410a-b79b-2ca77e540093 To reform South Carolina's tax code so that it fairly and sustainably funds core government functions by shifting the tax mix toward consumption and usage, empowering taxpayers with direct control over discretionary tax expenditures, and building in continuous adaptation to technological change. _e5ccb407-9b0d-4dfb-ad22-5e124bc18ba4 Fairness The tax burden should be spread according to use and consumption rather than concentrated on earning, and should not depend on which taxpayers succeed in obtaining special-interest carve-outs. Taxpayer Empowerment Individual taxpayers, not only their elected representatives, should have a direct voice in whether and how much discretionary tax expenditures are funded. Fiscal Discipline Government should collect and spend no more than core functions require, justified program by program rather than assumed from prior years. Adaptability Tax policy should anticipate shifts in technology and the economy rather than react to erosion of the tax base after the fact. Transparency Transparency of Cross-Subsidies ~ Any departure from cost-occasioned charges or from direct taxpayer direction of discretionary expenditures should be disclosed explicitly rather than embedded silently in rate schedules or legislative negotiation. Tax Mix Rebalance the Tax Mix Toward Consumption _188d3390-433b-4dfe-a329-e6cae7bf852e 1 Shift South Carolina's tax structure to rely more heavily on consumption-based taxes and less on income taxes, on the premise that taxing spending is generally fairer and more conducive to economic growth than taxing earning, while avoiding dangerous over-reliance on any single source of revenue. ^^ Submitter's Perspective: Since politics is largely about forcing others to pay for things that we think we want and making the costs difficult to see, it may be infeasible to shift the balance more toward the taxation of consumption. However, the point should be made in the event that enlightened policymakers may be willing and able to do something about it. ^^ For FY2026-27, South Carolina's General Fund revenue of approximately $14.8 billion derives 43.8 percent from Individual Income Tax ($6.49 billion), 8.1 percent from Corporate Income Tax ($1.20 billion), and 36.5 percent from Retail Sales Tax ($5.41 billion), with all other sources making up the remaining 11.6 percent ($1.71 billion). Individual and corporate income taxes together account for 51.9 percent of General Fund revenue, confirming this goal's premise that the state depends on a single, economically volatile source for a majority of its General Fund. Revenue Reduce Income Tax Share of General Fund Revenue _30428dec-0a4e-44d2-9b40-3b45eea0e1c2 1.1 Decrease the percentage of General Fund revenue derived from individual and corporate income taxes, offsetting the reduction with a broadened and/or adjusted consumption tax base, while keeping overall rates on every tax type as low as practicable. ^^ For FY2026-27, Individual Income Tax ($6.49 billion, 43.8 percent) and Corporate Income Tax ($1.20 billion, 8.1 percent) together account for 51.9 percent of the $14.8 billion in General Fund revenue, versus 36.5 percent ($5.41 billion) from Retail Sales Tax. 1.1.1 Combined Individual and Corporate Income Tax Revenue US Dollars Status ID-84A12254-E434-4317-BC58-82D8867EC5B6 2026-07-01 2027-06-30 7695256000 FY2026-27 Executive Budget Recommendation 1.1.2 Income Tax Share of General Fund Revenue Percent Status ID-B480AEBE-D94A-4FC1-BB6C-EE84F09EC18C 2026-07-01 2027-06-30 51.9 FY2026-27 Executive Budget Recommendation Base Broaden the Consumption Tax Base _9193db81-f330-48cb-8625-8c2defce655d 1.2 Review and reduce the more than 100 existing sales tax exemptions, worth over $3 billion annually, in order to broaden the sales tax base without necessarily raising the rate. 1.2.1 Sales Tax Exemptions, Estimated Annual Value US Dollars Status ID-11C1847E-B91D-4882-B148-C94800A85EE7 3000000000 Approximate; more than $3 billion annually Order-of-magnitude estimate; a precise, independently verified current total was not available for this plan. 1.2.2 Number of Sales Tax Exemptions Number Status ID-695AF481-39F2-4CF3-A2F1-6B13184590F8 100 More than 100 currently in effect Revenue Neutrality Ensure Revenue-Neutral Phase-In of Any Tax-Mix Shift _a7c3e9f2-1b4d-4e8a-9c5f-6d2e8b0a3f17 1.3 Any legislative shift that reduces the income-tax share of General Fund revenue or broadens the sales-tax base shall be scored by the Revenue and Fiscal Affairs Office as revenue-neutral over a defined multi-year window (recommended 3–5 years) and shall be accompanied by a public phase-in schedule so that overall rates remain as low as practicable and no sudden revenue shortfall is created. ^^ A simple public dashboard showing the actual versus planned shares of income versus consumption taxes shall be published annually. 1.3.1 Multi-Year Revenue-Neutrality Scoring Requirement Status ID-F1A2B3C4-D5E6-4789-A0B1-C2D3E4F5A6B7 Not Yet Required No statutory requirement currently exists for multi-year revenue-neutral scoring of tax-mix changes, as of this plan's publication. 1.3.2 Public Tax-Mix Dashboard Status ID-E2B3C4D5-E6F7-4890-B1C2-D3E4F5A6B7C8 Not Yet Published No recurring public dashboard tracking the actual versus planned shares of income versus consumption taxes currently exists, as of this plan's publication. User Fees Fund Infrastructure Through User Fees _80dacc0f-29e5-4555-9a79-bc0022d42ff3 2 Ensure that highways, bridges, and other transportation infrastructure, as well as other state services capable of being funded by their users, are paid for primarily by the people who use them, through mechanisms that scale with actual usage rather than general taxation. ^^ South Carolina's motor fuel user fee (28.75 cents per gallon) generates roughly $900 million to $1 billion annually on approximately 3.2 billion gallons of fuel sold each year, while the Department of Transportation's total FY2026-27 budget is approximately $2.54 billion — of which only $358 million (2.5 percent of the General Fund) comes from general tax revenue, with the remainder from dedicated Other Funds and federal highway funds. This goal concerns that dedicated user-fee and federal revenue base, not the General Fund tax mix addressed in Goal 1. Tolling Implement Statewide Automated Usage-Based Tolling _3c4a99e1-f40c-42ad-869e-00e5d61f54b0 2.1 Deploy automated tolling broadly enough to apply wherever vehicles travel, not only on major highways and bridges, so that vehicles pay their way across the road network they actually use, with costs disclosed to drivers in advance. This reduces reliance on a per-gallon gas tax whose yield is eroding as vehicles become more fuel-efficient and electrified. ^^ This objective originally stood alongside a separate Mileage Fees objective studying mileage-based user fees as a longer-term alternative to the gas tax. On clarification that this objective's intent was always for tolling to extend across the whole network vehicles travel, not just major highways and bridges, the two were merged: a sufficiently comprehensive tolling system and a mileage-based fee accomplish the same end by different means, and maintaining both as separate objectives was redundant. ^^ South Carolina's total vehicle miles traveled (VMT) was approximately 60.79 billion in 2023 (FHWA Highway Statistics). The motor fuel user fee this objective would ultimately replace generates approximately $1.15 billion annually at its current 28-cent base rate (SC Revenue and Fiscal Affairs Office, FY2022-23 estimate). Dividing the latter by the former yields a uniform, revenue-neutral rate of approximately 1.89 cents per mile if applied flatly to all vehicles. ^^ A uniform rate, however, does not reflect established highway engineering. Pavement damage rises roughly with the fourth power of axle load (the "fourth power law," derived from the 1950s AASHO Road Test), such that a fully loaded 5-axle tractor-trailer causes pavement damage roughly equivalent to 9,600 passenger cars. Oregon operates a real, currently functioning weight-mile tax reflecting this: commercial vehicles over 26,000 lbs pay a per-mile rate that rises with declared weight, from $0.0764/mile near that threshold to $0.2411/mile for the heaviest configurations, while ordinary passenger vehicles and light trucks are exempt from Oregon's system entirely. Oregon demonstrates that a weight-differentiated per-mile system is administratively workable; its specific rates, however, reflect Oregon's own funding target and truck mix, not South Carolina's actual costs, and should not be adopted directly. ^^ Two caveats limit how far weight-based differentiation should reasonably extend. First, the fourth-power relationship is well-supported for distinguishing heavy trucks from passenger vehicles, but not for finer distinctions among ordinary passenger vehicles, SUVs, light trucks, and heavier EVs — modern pavements are designed with sufficient margin above light-vehicle loads that weight differences within that fleet do not produce measurably different damage. Any weight-based tier should therefore apply at the commercial-truck boundary, not as a sliding scale across the entire light-duty fleet. Second, vehicle length is not itself a driver of pavement damage — axle load is — so length should not be treated as an independent charge alongside weight. ^^ The principle this objective should follow is that each vehicle class pays according to the actual cost of its usage, no more and no less — a "cost-occasioned" standard, not an arbitrary continuation of whatever burden the current fuel tax happens to produce, and not a rate schedule borrowed from another state. This is exactly what FHWA's Federal Highway Cost Allocation Studies (HCAS) are designed to measure: comparing what each vehicle class pays in highway user fees against the highway costs it actually occasions, primarily through pavement and bridge wear. FHWA's most recent such study (1997, with a 2000 addendum) found combination trucks paying an estimated 90 percent of the highway costs they occasion nationally, with other vehicle classes closer to parity — a modest, not dramatic, underpayment, and a national, dated finding rather than a South Carolina-specific one. ^^ South Carolina should conduct its own cost allocation study before setting rates, rather than adopting the national figure, Oregon's rates, or a fuel-tax-derived approximation. FHWA provides free software for this purpose (the Highway Cost Allocation Study Program, or HCASP), already used by other states, including Minnesota, to calculate state-specific cost-responsibility ratios by vehicle class. If the Legislature ultimately sets rates that depart from what such a study finds a vehicle class actually costs, for whatever policy reason, that choice should be disclosed transparently rather than embedded silently in the rate design; see Objective 3.2. ^^ The exact rate split between light-duty and heavy-truck tiers, once a South Carolina cost allocation study exists, would also need South Carolina's specific truck share of total VMT, which was not available from the public sources consulted for this plan; a commonly cited national approximation is 8 to 10 percent, but SCDOT's Highway Performance Monitoring System (HPMS) submissions to FHWA would provide a South Carolina-specific figure. ^^ Privacy and equity safeguards ~ Any statewide usage-based system must incorporate: ^^ (a) strict limits on location-data retention and secondary use, ^^ (b) anonymous or aggregated options for light-duty vehicles where technologically feasible, and ^^ (c) a transparent low-income or rural transition credit or rebate funded from the same user-fee pool so that the shift does not impose a sudden net burden on households that currently pay less under the motor-fuel tax. ^^ Implementation shall proceed in stages: completion of the South Carolina cost-allocation study, a limited pilot, network-wide deployment, and a scheduled phase-out of the motor-fuel user fee once replacement revenue is stable. 2.1.1 Motor Fuel User Fee Revenue US Dollars Status ID-4742450D-8442-428D-9522-75D1BEC4F576 2022-07-01 2023-06-30 1151424000 SC Revenue and Fiscal Affairs Office, FY2022-23 estimate at the fee's 28-cent base rate (DOT + DNR + County "C" Funds combined) The revenue this objective would replace or reallocate as tolling extends across the network. 2.1.2 SC Department of Transportation Total Budget US Dollars Status ID-625F43B6-84A0-481B-B5DA-50E6C3364FA4 _da9b8c7d-ae1f-47ce-da6b-7c8d9e0f1a2b See Objective 5.7 for the General Fund share of this total 2026-07-01 2027-06-30 2540000000 Approximate, FY2026-27; includes Other Funds and Federal Funds 2.1.3 Total Vehicle Miles Traveled Miles Status ID-B3742CC4-5BE6-4013-B0BF-2FD6A4D5C94D 2023-01-01 2023-12-31 60794000000 FHWA Highway Statistics, 2023 State Statistical Abstract 2.1.4 Revenue-Neutral Flat Mileage Fee Rate (Uniform, Pre-Weight-Adjustment) US Dollars per Mile Status ID-8B1AE2F5-B101-4B81-B68F-5DF7AD0F66C9 0.0189 Derived: Motor Fuel User Fee Revenue (2.1.1) ÷ Total VMT (2.1.3) Illustrative uniform rate only; superseded as a target by the cost-occasioned approach described in this objective's OtherInformation (see Indicators 2.1.7 and 2.1.8). 2.1.5 Truck Share of Total Vehicle Miles Traveled Percent Status ID-A17C48BA-B887-4BAC-87BC-A56E5045561E 9 National approximation (commonly cited range: 8-10 percent) A South Carolina-specific figure was not available from the public sources consulted for this plan. SCDOT's Highway Performance Monitoring System (HPMS) submissions to FHWA would provide one. 2.1.6 Oregon Weight-Mile Tax Rate Range for Heavy Trucks (Precedent, Not a Proposed SC Rate) US Dollars per Mile Status ID-7F0547E4-E9C6-45C7-9ABD-45069DB9D520 0.0764 Minimum rate, ~26,001 lbs declared weight 0.2411 Maximum rate, 80,000+ lbs declared weight 2.1.7 Highway Cost Allocation Equity Ratio, Combination Trucks (Fees Paid ÷ Cost Occasioned) Ratio (1.0 = full cost recovery) Status ID-324F7D1A-BF4E-428E-9519-206B082A6685 2000-01-01 2000-12-31 0.9 FHWA 1997 Federal Highway Cost Allocation Study, 2000 Addendum National finding, not South Carolina-specific, and roughly 25 years old: combination trucks nationally paid an estimated 90 percent of the highway costs they occasioned. Other broad vehicle classes (passenger vehicles, single-unit trucks) were found closer to parity. Cited as the best available benchmark pending a South Carolina-specific study. 2.1.8 South Carolina-Specific Highway Cost Allocation Study Status ID-3BAEB233-1CBE-4851-93D0-E51D6C3C4DFC Not Yet Conducted No South Carolina-specific cost allocation study exists, as of this plan's publication. FHWA's Highway Cost Allocation Study Program (HCASP) software could be used to produce South Carolina-specific equity ratios by vehicle class, as other states, including Minnesota, have already done. 2.1.9 Privacy and Data-Retention Safeguards for Usage-Based Charges Status ID-A1B2C3D4-E5F6-4789-A0B1-C2D3E4F5A6B8 Not Yet Established No statutory privacy architecture for a statewide usage-based tolling or mileage-fee system currently exists, as of this plan's publication. 2.1.10 Low-Income or Rural Transition Mechanism Status ID-B2C3D4E5-F6A7-4890-B1C2-D3E4F5A6B7C9 Not Yet Designed No dedicated transition credit or rebate for low-income or high-mileage rural households has been designed, as of this plan's publication. 2.1.11 Staged Implementation Roadmap (Study → Pilot → Network → Gas-Tax Phase-Out) Status ID-C3D4E5F6-A7B8-4901-C2D3-E4F5A6B7C8D0 Not Yet Adopted No formal staged roadmap with public milestones currently exists, as of this plan's publication. Recreation Licensing Maintain Full Cost Recovery for Recreational Licensing Fees _a17e2c4f-6b91-4e3a-9d5c-2f8e0b7a19c3 2.2 Periodically adjust hunting, fishing, and other recreational licensing fees administered by the Department of Natural Resources to keep pace with the cost of the wildlife management and enforcement programs they fund (currently about $25.7 million annually), preserving this user-funded system's self-sufficiency rather than allowing inflation to erode it. 2.2.1 Hunting and Fishing License Revenue US Dollars Status ID-09B78F35-644E-4F28-B2E1-99045A122B22 2024-01-01 2024-12-31 25700000 Calendar Year 2024, U.S. Census Bureau State Government Tax Collections State Parks Maintain Full Cost Recovery for State Park Operations _5d8f3a2e-1c76-4b09-8e4d-7a2f9c6b3e18 2.3 Periodically adjust state park entrance, camping, and concession fees to preserve the complete operational self-sufficiency the State Park Service has already achieved, ensuring park operations continue to be funded by park users rather than general taxpayers as costs change over time. ^^ The State Park Service achieved complete operational self-sufficiency — funding its own operations from user fees with no General Fund subsidy — for the first time in FY2019, according to the agency's annual accountability report. 2.3.1 Operational Self-Sufficiency Status Status ID-A3B86D75-1379-44F1-95F5-336B2D652886 2019-06-30 Self-Sufficient (no General Fund subsidy) Achieved for the first time in FY2019, per the SC Department of Parks, Recreation and Tourism's annual accountability report. Discretionary Expenditures Empower Taxpayers to Direct Discretionary Expenditures _01d6fe32-12ce-4903-b99e-6aadebc14faf 3 Replace the current legislature-driven process for creating and maintaining special-interest tax exemptions and credits, and for allocating discretionary spending programs, with a mechanism that lets individual taxpayers decide, through their own state tax returns, whether and how much to fund specific tax exemptions and credits as well as specific discretionary spending items, rather than leaving those choices entirely to legislative negotiation. ^^ Efforts should be made to encourage and incentivize those who believe more should be spent for social welfare purposes to increase their donations to charitable organizations addressing such needs. ^^ For FY2026-27, South Carolina's General Fund appropriations of $14.04 billion break down as: K-12 Education, $4.70 billion (33.5 percent); Health and Social Services, $3.82 billion (27.2 percent); Public Safety and Criminal Justice, $1.65 billion (11.7 percent); Higher Education, $1.61 billion (11.5 percent); General Government and Cultural, $1.31 billion (9.3 percent); Economic Development and Natural Resources, $474 million (3.4 percent); Transportation, $358 million (2.5 percent); and Regulatory, $121 million (0.9 percent). Much of this total is not discretionary in any meaningful annual sense: K-12 funding follows a per-pupil formula, and Health and Social Services is dominated by Medicaid, whose state share is driven by enrollment and federal program rules (South Carolina's total Medicaid program is $8.9 billion, of which the federal government funds $6.7 billion, or 75 percent). The pool of spending genuinely subject to annual legislative discretion is considerably smaller than the $14 billion headline figure — on the order of a few hundred million dollars in most budget cycles — and any taxpayer-directed mechanism under this goal should be sized against that realistic base rather than the full General Fund total. Goal 5, Comprehensive Accounting, presents this same breakdown as structured Performance Indicators, category by category. Exemptions, Credits & Spending Establish a Taxpayer Checkoff Mechanism for Tax Exemptions, Credits, and Discretionary Spending _d5e4e104-2b88-4c15-b8e4-996df8e911f1 3.1 Design and implement a system, integrated into the state individual income tax return, through which taxpayers can allocate support for specific existing sales tax exemptions and income tax credits, as well as specific discretionary spending programs in the state budget, subjecting the more than $3 billion in current tax exemptions, 110-plus tax credits, and discretionary appropriations to ongoing, direct taxpayer consent rather than only legislative negotiation. ^^ The more than $3 billion in current sales tax exemptions is forgone revenue rather than an appropriated expenditure. The corresponding discretionary-spending base subject to a checkoff mechanism is limited to the smaller pool of General Fund spending not already committed by formula, multi-year obligation, or federal matching requirement — realistically on the order of a few hundred million dollars per year rather than the full $14 billion General Fund. ^^ The checkoff mechanism shall initially apply only to the annually calculated discretionary base (General Fund appropriations minus formula-driven K-12, Medicaid state share, debt service, constitutional requirements, and multi-year obligations) plus the existing list of sales-tax exemptions and income-tax credits. Expanding the mechanism to formula-driven items would require separate statutory or constitutional changes and is outside the scope of the first iteration. 3.1.1 Sales Tax Exemptions Subject to Checkoff US Dollars Status ID-A8B84EA4-5566-4F87-877A-2037B765941F _9193db81-f330-48cb-8625-8c2defce655d See Objective 1.2 for this figure 3.1.2 Illustrative Net New Recurring General Fund Revenue, Single Budget Cycle US Dollars Status ID-9660A313-BCE8-4808-AE10-18D8D356B585 2026-07-01 2027-06-30 733900000 FY2026-27 House Ways and Means Budget Briefing example Illustrative single-year data point showing the rough scale of genuinely new, uncommitted General Fund revenue in a typical budget cycle; not a stable or official definition of "discretionary spending." 3.1.3 Annual Official Definition of Discretionary Base Status ID-D4E5F6A7-B8C9-4012-D3E4-F5A6B7C8D9E1 Not Yet Published No official, annually updated calculation of the discretionary base currently exists, as of this plan's publication. Report Publish Annual Report on Budget Allocation and Taxpayer Options _c49e3bf6-850a-4866-a974-2c67273a6417 3.2 Publish an annual public report, provided to both the Legislature and individual taxpayers, showing how General Fund revenues are allocated across programs and discretionary spending items, the estimated cost of each tax exemption and credit, and the specific options available to taxpayers for directing their own taxes among those exemptions, credits, and discretionary spending programs through their tax returns. ^^ This report should present the full General Fund breakdown (currently $14.04 billion across eight functional categories) alongside the smaller subset of spending actually available for taxpayer-directed reallocation, so taxpayers can see both the whole picture and the real extent of their control over it. Goal 5's objectives are this report's categories, rendered as structured Performance Indicators. ^^ For Objective 2.1's tolling and mileage-based fees, this report should also publish the ratio of fees paid to highway costs occasioned by each vehicle class, the same "equity ratio" concept used in FHWA's Highway Cost Allocation Studies (see Objective 2.1, Indicators 2.1.7 and 2.1.8). If the Legislature sets rates that depart from actual cost responsibility for any vehicle class, the resulting cross-subsidy between classes should be disclosed through this ratio rather than left invisible inside the rate schedule. ^^ The report shall also publish the official discretionary-base calculation for the year and the vehicle-class fee-to-cost equity ratios required under Objective 2.1 so that any cross-subsidies are visible to both the Legislature and individual taxpayers. 3.2.1 Annual Budget Allocation and Taxpayer Options Report Status ID-FD9B3EA1-A861-458C-9760-EF023826C29C Published First report published no later than the FY2027-28 budget cycle. Not Yet Published No report of this kind is currently published, as of this plan's publication. 3.2.2 Vehicle-Class Fee/Cost Equity Ratio Disclosure Status ID-AA891EDB-59E5-46CB-918B-CA619DEB0B0E _3c4a99e1-f40c-42ad-869e-00e5d61f54b0 See Objective 2.1, Indicators 2.1.7 and 2.1.8 Published First disclosure published no later than the FY2027-28 budget cycle, concurrent with the initial Budget Allocation and Taxpayer Options Report. Not Yet Published No disclosure of fee-to-cost equity ratios by vehicle class is currently published, as of this plan's publication. Charitable Giving Encourage Private Charitable Giving as a Complement to Government Social Welfare Spending _402144c1-0027-4566-bdd0-6039335be202 3.3 Encourage and incentivize South Carolinians who believe more should be spent on social welfare purposes to increase their voluntary donations to organizations addressing those needs — for example, through enhanced state tax credits or deductions for charitable contributions — as a channel for that preference that doesn't require expanding government spending. ^^ Submitter's Perspective: The degree that some taxpayers may be unwilling to increase their giving unless others are forced to do likewise calls into question their support for the causes about which they claim to care. Technological Change Adapt Tax Policy to Technological Change _12aa1b00-1602-43f6-81ec-0d75940fb5f0 4 Ensure that South Carolina's tax system anticipates and adapts to rapid technological and economic change, rather than reacting to erosion of its tax base after the fact. Impacts Establish a Periodic Technology Impact Review _ee2331a4-96ac-4815-bccd-2ff0d8d7017e 4.1 Require the legislature, or an appropriate agency, to conduct a review no less than every two years assessing how technological trends, such as automation, e-commerce, autonomous and electric vehicles, and digital and remote services, are affecting the state's tax base, and to recommend adjustments accordingly. 4.1.1 Periodic Technology Impact Review Status ID-86A07971-BAF4-4288-B4B3-9FF83E5CCC26 2027-12-31 Completed First review completed and published no later than the end of calendar year 2027, with subsequent reviews at least every two years thereafter. Not Yet Established No formal recurring review of this kind currently exists, as of this plan's publication. Budgeting Incorporate Technology Assessment into Zero-Based Budgeting _3dba161c-4b1d-4e3f-83ce-8585ed830ac7 4.2 Account for the impact of adopted technologies, including their potential to automate or eliminate the need for particular government programs and budget line items, as part of the state's periodic zero-based budget reviews. 4.2.1 Zero-Based Budgeting Requirement Status ID-E052009C-BC6B-4B03-9C10-C79BD6238FAE 2027-07-01 2029-06-30 Enacted Statutory or budgetary requirement for technology-informed zero-based review of selected programs enacted no later than the FY2028-29 budget cycle. 2026-09-17 Not Yet Required South Carolina's current budget process is predominantly incremental: agencies request new money while existing budgets largely roll forward unexamined, as of this plan's publication. Structured Strategy Data Adopt Machine-Readable Strategic and Performance Plans _1f9e8d7c-6b5a-4392-8f1e-0d9c8b7a6f5e 4.3 Require South Carolina state agencies to publish their strategic plans, performance plans, and performance reports in an open, machine-readable format, such as StratML (ISO 17469-1), so that programs and budget line items can be compared, aggregated, and ranked across agencies rather than read one narrative document at a time. This is the data infrastructure the periodic technology impact review (Objective 4.1) and zero-based budgeting (Objective 4.2) both depend on: neither an annual technology-impact review nor a requirement that agencies rank and justify every program is practical at scale if the only representation of a program is a paragraph in an appropriations bill. ^^ Section 10 of the GPRA Modernization Act already directs federal agencies to publish their strategic plans and performance reports in machine-readable format; this objective extends that established federal practice to South Carolina. The U.S. General Services Administration's U.S. Strategy Data Fellowship is one current federal effort exploring AI-ready strategy data along these lines, with State Governments listed among its voluntary, interested participants; this objective does not depend on that particular initiative continuing, but treats it as evidence that the federal government is moving in this direction. ^^ The annual Budget Allocation and Taxpayer Options Report (Objective 3.2) and the periodic technology-impact reviews (Objective 4.1) shall be published in the same open, machine-readable format, using stable identifiers that link budget line items to strategic objectives across agencies. 4.3.1 Machine-Readable Strategic and Performance Plan Requirement Status ID-E45BAC43-2290-42C3-A0A2-0E0E41611EFD 2028-07-01 2029-06-30 Statutory or executive requirement in place no later than the FY2028-29 budget cycle, with the first set of machine-readable plans published thereafter. 2026-09-17 Not Yet Required South Carolina does not currently require agencies to publish strategic or performance plans in machine-readable format, as of this plan's publication. 4.3.2 Machine-Readable Publication of Budget Allocation Report and Technology Reviews Status ID-E5F6A7B8-C9D0-4123-E4F5-A6B7C8D9E0F2 Not Yet Required No requirement currently exists for the Budget Allocation Report or technology-impact reviews to be published in machine-readable format linked to strategic objectives, as of this plan's publication. Comprehensive Accounting Document the Full Allocation of General Fund Appropriations _6e2f1a4c-8b3d-4a91-9c7e-2d5f8a1b3c6e 5 This goal operationalizes the annual public report called for in Objective 3.2, rendering it in structured, machine-readable form. Its eight objectives partition the entire $14.04 billion FY2026-27 General Fund among the functional categories identified in the state's Executive Budget, so that the categories already addressed elsewhere in this plan (Goal 1's revenue mix, Goal 2's transportation user fees, Goal 3's discretionary spending and tax expenditures) can be seen in the context of the full budget, alongside the large categories — Health and Social Services, K-12 Education, Higher Education, and Public Safety — that this plan does not propose to reform. ^^ Consistent with the decision to take a purely descriptive approach at this stage, none of these objectives proposes a target or a change; each documents the current appropriation as an Actual Result. Figures are drawn from the Governor's FY2026-27 Executive Budget recommendation as published; the final enacted General Appropriations Act may differ.^^ The detailed figures are retained as the analytical baseline from the Governor's January 2026 Executive Budget recommendation. The subsequently enacted FY2026-27 appropriations differ and should be distinguished from this baseline when interpreting the figures in this goal. K-12 Education Document K-12 Education Appropriations _7a3b2c1d-4e5f-4678-9a0b-1c2d3e4f5a6b 5.1 K-12 Education is the largest single category of General Fund spending, funded primarily through the state's per-pupil funding formula rather than annual legislative discretion. This objective documents the current appropriation without proposing any change. 5.1.1 General Fund Appropriation US Dollars Status ID-16D9CEA6-B85F-4720-B0A6-540C690C3E1A 2026-07-01 2027-06-30 4702137726 FY2026-27 Executive Budget Recommendation 5.1.2 Share of General Fund Appropriations Percent Status ID-3B56722E-4A07-44AE-A37D-F91A2E89A89D 2026-07-01 2027-06-30 33.5 FY2026-27 Executive Budget Recommendation Health & Social Services Document Health and Social Services Appropriations _8b4c3d2e-5f6a-4789-8b1c-2d3e4f5a6b7c 5.2 Health and Social Services spending is dominated by Medicaid, whose state share is driven by enrollment and federal program rules rather than annual legislative discretion; federal funds cover approximately 75 percent of South Carolina's total $8.9 billion Medicaid program. This objective documents the current General Fund appropriation without proposing any change. 5.2.1 General Fund Appropriation US Dollars Status ID-51B14F3C-C32F-47CC-9D54-AF993494811D 2026-07-01 2027-06-30 3818617676 FY2026-27 Executive Budget Recommendation 5.2.2 Share of General Fund Appropriations Percent Status ID-9A00A40E-FDF6-4D3C-A5E6-0678947AC449 2026-07-01 2027-06-30 27.2 FY2026-27 Executive Budget Recommendation Public Safety Document Public Safety and Criminal Justice Appropriations _9c5d4e3f-6a7b-478a-9c2d-3e4f5a6b7c8d 5.3 Public safety and criminal justice functions are core government responsibilities generally considered non-discretionary. This objective documents the current appropriation without proposing any change. 5.3.1 General Fund Appropriation US Dollars Status ID-FB9595F8-4A22-49EB-8916-D4D8DA4F31D0 2026-07-01 2027-06-30 1645289445 FY2026-27 Executive Budget Recommendation 5.3.2 Share of General Fund Appropriations Percent Status ID-D24FAE3E-CE77-4863-94CB-001905C7FBA1 2026-07-01 2027-06-30 11.7 FY2026-27 Executive Budget Recommendation Higher Education Document Higher Education Appropriations _ad6e5f4a-7b8c-479b-ad3e-4f5a6b7c8d9e 5.4 Higher education appropriations are largely driven by enrollment-based tuition mitigation formulas rather than annual legislative discretion. This objective documents the current appropriation without proposing any change. 5.4.1 General Fund Appropriation US Dollars Status ID-38D9EEDB-C550-4FB3-86AB-A5575D35AACC 2026-07-01 2027-06-30 1609840484 FY2026-27 Executive Budget Recommendation 5.4.2 Share of General Fund Appropriations Percent Status ID-4518A683-074B-4A81-8E87-6A9A2E7C4F4B 2026-07-01 2027-06-30 11.5 FY2026-27 Executive Budget Recommendation General Government & Cultural Document General Government and Cultural Appropriations _be7f6a5b-8c9d-47ac-be4f-5a6b7c8d9e0f 5.5 This category includes general administrative, cultural, and miscellaneous agency functions and is among the more discretionary portions of the General Fund. This objective documents the current appropriation without proposing any change; the degree of genuine year-to-year discretion within it warrants further examination. 5.5.1 General Fund Appropriation US Dollars Status ID-7534208F-2371-4A45-B4F9-B84088DCB891 2026-07-01 2027-06-30 1310020906 FY2026-27 Executive Budget Recommendation 5.5.2 Share of General Fund Appropriations Percent Status ID-9CB10AAB-78AF-4FF0-9867-3A51C4E8BBA1 2026-07-01 2027-06-30 9.3 FY2026-27 Executive Budget Recommendation Economic Development & Natural Resources Document Economic Development and Natural Resources Appropriations _cf8a7b6c-9d0e-47bd-cf5a-6b7c8d9e0f1a 5.6 This category includes economic development incentives and natural resource agencies, including the recreational licensing and state park functions addressed in Goal 2's Objectives 2.2 and 2.3. This objective documents the full category's General Fund appropriation without proposing any change. 5.6.1 General Fund Appropriation US Dollars Status ID-3FEEBC7D-7A5E-4197-9F06-12AA2B72DBC9 2026-07-01 2027-06-30 473856253 FY2026-27 Executive Budget Recommendation 5.6.2 Share of General Fund Appropriations Percent Status ID-B8A11EA7-E043-4885-B9F7-AA939B839360 2026-07-01 2027-06-30 3.4 FY2026-27 Executive Budget Recommendation Transportation (General Fund) Document the General Fund Portion of Transportation Appropriations _da9b8c7d-ae1f-47ce-da6b-7c8d9e0f1a2b 5.7 This figure reflects only the General Fund portion of transportation spending; the great majority of the Department of Transportation's approximately $2.54 billion total budget is funded through dedicated motor fuel user fees and federal highway funds, addressed in Goal 2. This objective documents the General Fund slice without proposing any change beyond what Goal 2 already addresses. 5.7.1 General Fund Appropriation US Dollars Status ID-0C14A09E-2809-4F2B-8F0C-8400DCABA170 2026-07-01 2027-06-30 357617157 FY2026-27 Executive Budget Recommendation 5.7.2 Share of General Fund Appropriations Percent Status ID-15589E8D-9A16-4EDA-B8B5-6B6B65E4F651 2026-07-01 2027-06-30 2.5 FY2026-27 Executive Budget Recommendation Regulatory Document Regulatory Agency Appropriations _eb0c9d8e-bf2a-47df-eb7c-8d9e0f1a2b3c 5.8 This objective documents the current appropriation for regulatory agencies without proposing any change. 5.8.1 General Fund Appropriation US Dollars Status ID-6C6C9F6F-2748-408A-A297-3FBD7DB32E9D 2026-07-01 2027-06-30 120507374 FY2026-27 Executive Budget Recommendation 5.8.2 Share of General Fund Appropriations Percent Status ID-993EB406-4AB9-4115-AB30-F56D5908F898 2026-07-01 2027-06-30 0.9 FY2026-27 Executive Budget Recommendation 2026-09-17 https://stratml.us/docs/CSTR4SC.xml Owen Ambur Owen.Ambur@verizon.net