McMaster strikes Scout site audit in final SC budget vetoes

COLUMBIA, S.C. — Gov. Henry McMaster announced Monday he vetoed a budget measure that would have paused spending $150 million to cover cost overruns associated with the Scout Motors site until the completion of a state audit.

The veto was one of 14 announced by the governor Monday.

It is McMaster's final budget veto message as the state's CEO.

McMaster said that withholding the money was a "bad business policy" that he said could hurt South Carolina's image as an economic "handshake state."

"We owe the money, and we're contracted to do it and we have to pay it," McMaster said.

McMaster warned lawmakers earlier this year that the $150 million requested by the state commerce department to cover the Scout site overruns must be in the budget come July 1.

"That was part of the deal, that we’d make the site ready," McMaster said then. "This money isn’t going to Scout. It is going to the site to make that site ready. So, we will do what we said we were going to."

South Carolina's commerce department connected the overruns in part to a five-month delay over environmental permitting questions at the electric carmaker's Blythewood plant, McMaster said.

Lawmakers, however, wanted a fuller picture of what happened.

And they wanted to avoid similar overruns in the future.

Through the budget, the General Assembly set aside excess debt service for the Department of Natural Resources to cover mitigation work and for the transportation department to spend on road work at the site.

But lawmakers added a measure requiring that money not be spent until the Legislative Audit Council completed an audit that would be sent to lawmakers for review first.

State Sen. Tom Davis, who pushed for the audit first, told The State newspaper Monday the veto will hurt public confidence.

The budget measure "does not refuse to pay anyone. It declines to pay blind," Davis, R-Beaufort, told the newspaper.

McMaster said a state inquiry could still occur, repeating though that bills must be paid now.

"For work that has been done, the bills should be paid now," McMaster said in his veto message. "... Delaying payment until sometime in the 2027 legislative session will severely damage South Carolina's pro-business environment and would likely result in avoidable litigation."

It is unlikely the General Assembly will return to Columbia to deal with the governor's vetoes.