Taxes, a $15.4B Budget, and a Supreme Court Seat in Play

Week of February 16, 2026

Let's be honest.  If you blinked this week, you missed a lot. Week 6 of the 2026 legislative session was one of those weeks where you had to be in three rooms at once. The Senate was debating generational tax policy on the floor, the House was cranking through a $15.4 billion budget in committee, and in the background, a steady drumbeat of social policy bills kept marching through subcommittees. Welcome to February at the State House!

Here's what you need to know.

The Big Story: Money, Money, Money

If there was one through-line this week, it was taxes and the budget. These are the weeks when real policy gets made.  Not the press releases, not the speeches. The votes.

The flat income tax is coming. H. 4216 was on the Senate floor. The bill restructures South Carolina’s current 6% top income tax rate into a two-tier system: 1.99% on taxable income under $30,000, and 5.39% on everything above it. It eliminates the federal standard and itemized deductions and right there is where the debate gets complicated.  Depending on your income and deduction profile, this bill cuts taxes for some and raises them for others. The Revenue and Fiscal Affairs Office estimates a first-year general fund impact of roughly $400 million. The longer-term vision, baked into the bill's trigger mechanism, is to gradually collapse both rates down to 1.99% and eventually to zero if annual income tax revenue growth hits at least 5%. That is a long-range bet on South Carolina's economic trajectory.

Debate was interrupted last week meaning this bill will be on next week's Senate calendar. About 24% of filers are projected to see an increase under the current structure.

The contrast on the other side of the aisle is worth noting. Senate Democrats filed S. 825 (Family Protection Act), taking a different approach entirely, rather than restructuring rates, it targets relief through expanded earned income tax credits, child care credits, and employer incentives. Same goal, fundamentally different philosophy on who gets the benefit first.

S. 825 is unlikely to advance on its own in a chamber where Republicans hold a commanding majority. But watch for its provisions to resurface as floor amendments when H. 4216 comes up for debate next week.

That's not a prediction, that's just how the game is played.

Meanwhile, the Senate passed a property tax win for seniors— and it wasn't close. S. 768, Senate Finance Chairman Harvey Peeler's homestead exemption expansion, passed 44-0. The bill creates a tiered structure for homeowners 65 and older: five years of state residency gets you an exemption on the first $75,000 of your home's value, and ten years earns the full $150,000 exemption. Anyone already receiving the current $50,000 exemption is grandfathered in. The residency requirements are a direct response to South Carolina's staggering growth. Peeler filed this bill to run in tandem with the income tax bill. If both clear, it's one of the most significant tax relief packages this state has seen in decades.

The House budget landed. The Ways and Means Committee unanimously approved sending its $15.4 billion general fund spending plan to the House floor.

In our highest Mariah Carey octave, that means…. It’s Time! Budget season is no longer background noise. It's active news.

The Senate Calendar: A Crowded Docket

Beyond taxes, the Senate had a full plate this week. A few things worth flagging:

S. 183 (Drug-Induced Homicide) is on third reading. This bill creates a new criminal offense specifically targeting fentanyl and other drug suppliers when a death results from their product. It passed second reading 43-0 last session and is being contested by Sen. Hutto heading into the final vote.

H. 3305 (SC Public Expression Protection Act) (anti-SLAPP) is also on third reading, contested by Senators Sutton and Climer. This matters for businesses: it creates a legal mechanism to quickly dismiss frivolous lawsuits filed to silence people exercising their rights of petition or free speech.

H. 4902 transparency on the way, but not so fast. H. 4902, dealing with Name, Image and Likeness records at public universities, passed 30-13 and looked like it was heading straight to the governor. Then the Senate hit pause. A full Senate Education Committee hearing has been posted for Wednesday, February 25, specifically to work through senators' remaining questions before moving forward. It requires aggregate athletic revenue-sharing to be subject to FOIA while protecting individual athlete payments, sport-specific allocations, and negotiation records. This one isn't dead but it's not going to the governor's desk on a fast track either.

The House: Social Policy, Subcommittees, and AI

The House subcommittees were buzzing this week, and several bills that will generate headlines in coming weeks got their first real hearings.

H. 4764 (ICE) Collaboration Mandate was heard Tuesday in the House's AI, Cybersecurity & Special Laws Subcommittee. The bill would require every law enforcement agency operating a correctional facility to enter a 287(g) written collaboration agreement with ICE.

Supporters argue it fulfills the state's obligation to support federal immigration enforcement. Critics, including some local law enforcement officials, argue it will strain resources and damage community trust without a meaningful improvement in public safety. Based on the current administration’s interest on this issue, this bill is going to be one of the most contentious debates of the session. Watch it closely.

H. 4270 (Eviction Record Sealing) cleared subcommittee unanimously, a notable bipartisan moment for housing advocates. It would remove eviction filings from public records after six years. It still has a long road ahead, but unanimous subcommittee support is not nothing.

H. 4756 (Student Physical Privacy Act) has already passed the House and is now in the Senate Education subcommittee. The Senate's companion, S. 199, was heard Wednesday, February 18. These bills are on a fast track and both hearings drew significant public testimony on all sides.

S. 540 (Child Welfare) (Senate Child Welfare Subcommittee, Wednesday) would modify child welfare laws around gender-affirming care in foster placement specifically allowing faith-based agencies to decline placements that conflict with their beliefs and removing certain gender-affirming care requirements as a condition of foster approval.

The Subplot Nobody's Talking About Enough: The Supreme Court Seat

Mark your calendar for Wednesday, March 4. The General Assembly meets in joint session to elect judges and the most-watched contest is whether Justice John Few keeps his seat on the South Carolina Supreme Court. His primary challenger is former House Speaker Jay Lucas of Darlington.

Senate Majority Leader Shane Massey took to the floor this week and delivered what can only be described as a public broadside. He called Lucas "smart" and "pleasant to be around" then proceeded to argue that electing a former legislative leader with virtually no judicial experience would damage the institution's credibility. "Y'all, this looks really bad," Massey said. "It looks like backroom deals are being made for someone who is not as qualified for or deserving of the position. It looks like the legislators are cooking the books." He also reportedly told reporters that Lucas is "very close" to the 86 votes needed to win, which is precisely what makes the speech remarkable. It wasn't a speech to stop Lucas. It was a speech for the record.

There are four certified candidates: Justice Few, Lucas, Administrative Law Court Chief Judge Ralph Anderson III, and Appeals Court Judge Blake Hewitt. Lucas is the only one with no bench experience beyond a single year at the municipal level in the mid-1990s. The math tilts in Lucas's favor because the House, his former home, holds the majority of the vote. This race will shape business law, property rights, and regulatory outcomes in this state for years. Whether or not you care about judicial politics, you should care about this one.

What's Coming the Week of February 23

Next week is going to be loud. Here's what to watch:

The Senate floor takes up H. 4216 (Income Tax Rates), expect a real debate and amendments. The House is expected to begin floor debate on its budget. The Full Senate Education Committee meets Wednesday at 10 a.m. specifically on H. 4902 (NIL).

The Full House Judiciary Committee meets Tuesday the 24th, taking up bills from the Juvenile Crime Ad Hoc Committee including H. 5120 and H. 5121, covering youth offender fingerprinting and community juvenile crime prevention programs.

The Education and Public Works Full Committee also convenes Tuesday. The L.C.I. Banking and Insurance Subcommittee meets Wednesday morning.

Sine Die is May 14, 2026. That's it. Every bill not signed into law starts over. The clock is real, and it is ticking.

The Bottom Line

This session is moving faster than most people realize. The tax package alone, if it crosses the finish line, will reshape South Carolina's fiscal identity. The social policy bills are drawing public attention and significant media coverage. And behind the scenes, budget negotiations and a Supreme Court election are quietly determining the direction of state government for the next decade.

If you're not paying attention, or if you don't have someone in those rooms for you, you're already behind.

Alpha Strategies tracks South Carolina’s legislative process week by week to help organizations understand not just what happened, but what it means and what is coming next.

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