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South Carolina’s Board of Economic Advisors presented data on Thursday afternoon that show state tax revenue estimate is being reduced by $643.5 million as result of significant disruptions on the economy from the COVID-19 pandemic.
Because of South Carolina’s strong economy prior to the pandemic and its considerable surplus revenue, state revenues for the current fiscal year are not affected. However, Thursday’s move ensures the previously passed House version of the FY20-21 in no longer valid and must be adjusted. BEA economists cautioned they are making considerable assumptions because it is impossible to know when the economy will again approach normalcy.
The BEA will meet again May 14 and will likely again revise the estimate at that time. The General Assembly is expected to return to Columbia to adopt the FY20-21 state budget in September.
The board agreed to lower the projected revenue estimate by $643.5 million for FY20-21. Instead of new recurring revenue previously estimated at $888 million, the FY20-21 projection is $244 million
The estimated surplus of $567 million is now at $40 million. South Carolina has $305 million in its Contingency Reserve Fund.
The BEA is statutorily charged with providing the General Assembly with the official revenue estimate for lawmakers to draft the annual state budget. The board’s 22 pages of Thursday’s handouts can be found here.
