As a kid, do you remember when your dad gave you an allowance and said, ‘This is all you are getting, so make it last’? A simple command to follow, and for the most part, you did as you were told. This rationale clearly does not apply to South Carolina’s treatment of its fiscal responsibilities. Enacted in 1979 through Act No. 199, Part II, Section 8 (codified as Section 2-7-65), zero-based budgeting was designed to prevent unchecked spending growth by requiring agencies to justify every dollar from scratch each year. For nearly 30 years, this law served South Carolinians well, promoting efficiency and protecting taxpayer dollars. However, since 2009—amid the Great Recession—elected officials have ignored this mandate, reverting to incremental budgeting that justifies only new spending. This failure has allowed the state budget to balloon exponentially, eroding public trust and burdening future generations with unsustainable debt and taxes.
Proof of Exponential Budget Growth Due to Non-Adherence (Since 2008)
The unchecked growth in South Carolina’s total state spending (all funds) since the abandonment of full zero-based budgeting in 2009 is clearly evident. Starting from a baseline of approximately $2 billion in total appropriations for FY 1979-80 (under the original law), the budget has surged over 20-fold to $40.2 billion by FY 2025; a compound annual growth rate (CAGR) exceeding 5% when adjusted for inflation and population. This exponential trajectory, particularly post-2008, reflects the consequences of non-compliance: without rigorous zero-based scrutiny, spending on existing programs has compounded unchecked, fueled by economic recoveries, federal aid, and expanded government roles. Data compiled from South Carolina Revenue and Fiscal Affairs Office historical analyses, Ballotpedia, and enacted budgets.
Understanding Zero-Based Budgeting
Zero-based budgeting is a financial practice where every expense must be justified based on why it is needed and how it will be used, rather than simply carrying forward the previous year’s budget with incremental adjustments. This practice plays an important role in ensuring that taxpayer dollars are being put to good use by South Carolina’s government. Current unlawful budgeting methods assume prior spending levels are appropriate and only scrutinize increases. Zero-based budgeting requires agencies to build their budgets from scratch each cycle, defending every dollar requested. Zero-based budgeting is so important to fiscal accountability that South Carolina enshrined the practice into law.
What the Law Requires
Section 2-7-65 of the South Carolina Code is unambiguous in its requirements: “each state agency, department, or institution shall be required to justify its recurring expenses, as well as any new or additional expenses.” These required justifications must be reported to the Governor before he requests the annual budgets for agencies from the legislature. The justifications must also follow the specification made by the Budget and Control Board in consultation with the Joint Legislative Appropriations Review Committee.
The law seems pretty straightforward, with clear mandates and reporting structures in place, so why aren’t agencies following it?
The Compliance Gap
It starts and ends with the Governor. The law was followed for many years. It states,
“All state agencies and institutions shall submit their entire budget request to the Governor in accordance with the zero-based budget principles established in this section. Such requests must include justifications for all requested appropriations, both recurring and nonrecurring, new or additional, from a zero base, together with the purposes, objectives, and quantitative performance measures for each program. The Governor shall utilize these submissions to formulate recommendations to the General Assembly.” SECTION 2. Section 2-7-65 of the 1976 Code.
Perhaps elected officials are intentionally avoiding transparency in order to spend as they please to strengthen their ability to remain personally powerful? Another potential explanation could be that requiring agencies to justify their expenses for ongoing programs would be too cumbersome. After all, why should agencies follow the laws that govern them if that means more work? Sarcasm aside, it is deeply troubling that these agencies are not following the law, particularly when that law exists specifically to protect taxpayers and ensure government accountability.
Mark Sanford was the last Governor to follow ZZB. He adhered to it and vetoed numerous spending items that did not comply. The Governor has the bully pulpit. Sadly, McMaster has been silent on ZBB since he took office in 2017.
Broader Context of Budget Transparency
The government being transparent about how they use South Carolinians’ tax dollars should be an important issue to everyone in the state. Based on an executive order from this summer, that issue seems to have caught the attention of Governor McMaster.
On June 25, 2025, Governor McMaster released an executive order that tackled the related issue of earmarking in the state budget. Earmarking is the practice where legislators request surplus funds for specific, local projects. While earmarking can serve legitimate community needs, it is clear how this practice could be abused, with funds potentially directed to projects based on political considerations rather than merit or need. In his executive order, Governor McMaster required all state agencies to disclose all official and unofficial funding requests within 48 hours of the General Assembly ratifying the Annual Appropriations Act. (Connors, Beyond Temporary Fixes: Addressing Earmark Secrecy in South Carolina)
The lack of permanent, legislative earmarking requirements is still troublesome, but the executive order can be seen as a step in the right direction. It demonstrates that the Governor recognizes the importance of transparency and is willing to use his power to demand it. With the issue of earmarking now on the Governor’s radar, perhaps the issue of zero-based budgeting compliance will receive similar attention.
Compliance Remains the Key
So, how does S.C. enforce elected officials to do as they are told? How about strengthening the statute with penalties to enforce the original code of law? Although Florida and Texas have similar statutes, Texas has ventured the furthest toward addressing compliance; however still falls short in establishing concrete enforcement mechanisms. Texas Senate Bill 1315 focuses on implementing ZBB on the local government level and enhancing transparency by publishing budget requests submitted to County Auditors and County Clerks to the public.
Perhaps in SC, agencies that don’t comply with the process automatically lose the opportunity to increase their budget from the prior year, or lose a painful percentage of funding, or responsible agency employees lose their jobs? At the very least, the Executive Branch should be required to post online each agency’s budget request for public inspection.
ZBB Enforcement Act of 2026
Perhaps South Carolinians can encourage their public officials to enhance Zero-Based Budgeting by asking them to incorporate some form of enforcement provision in the statute. The following is an example of what that provision could look like:
A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 2-7-66 SO AS TO PROVIDE FOR THE STRICT ENFORCEMENT OF ZERO-BASED BUDGETING REQUIREMENTS UNDER SECTION 2-7-65; TO MANDATE FULL COMPLIANCE BY THE GOVERNOR, STATE AGENCIES, AND THE GENERAL ASSEMBLY IN THE ANNUAL BUDGET PROCESS; TO REQUIRE DETAILED JUSTIFICATIONS FOR ALL EXPENDITURES FROM A ZERO BASE; TO ESTABLISH PENALTIES FOR NON-COMPLIANCE; AND TO PROVIDE FOR OVERSIGHT AND REPORTING TO ENSURE ADHERENCE TO THE 1979 LAW AS CODIFIED IN ACT NO. 199 OF 1979.
Apathy is Not an Option
The law is clear on what agencies need to disclose to receive funding, and it should be the government’s priority to follow that law and ensure transparency in how they use South Carolinians’ tax dollars. When state agencies ignore statutory requirements for budget justification, they undermine public trust and weaken the very accountability mechanisms designed to protect taxpayers. South Carolina’s zero-based budgeting law isn’t a suggestion; it’s a legal mandate, and it’s time agencies started treating it as such.