Lawmakers will have about $600 million more than expected to spend when they return to finish the budget. (Photo illustration by Getty images)
COLUMBIA — Lawmakers will have $610 million more than estimated to dole out for the coming fiscal year when they return to finish the budget next month, as post-pandemic slowdowns have been less than economists feared.
Altogether, legislators will have new revenues of $2.2 billion to spend in the new budget year that starts July 1 — more than the $1.4 billion economists originally predicted back in November 2023.
That number “is a nice chunk of change for the budget staff,” said Frank Rainwater, executive director of the state’s Revenue and Fiscal Affairs Office.
Having extra money is not out of the ordinary for the state. Budget analysts tend to be conservative in their predictions to avoid overspending. But the latest numbers are much closer to original estimates than in recent years past.
That’s because South Carolina is returning to normal after an infusion of federal aid and extra spending from stimulus funds during the COVID-19 pandemic, Rainwater said.
“Everything’s kind of working its way out,” Rainwater told the Board of Economic Advisors during a Monday morning meeting.
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In the last couple years, the mid-year adjustment to revenue predictions has given lawmakers much more to spend as they’ve completed the state’s budget.
Economists expected a drop-off this year. While most of the state’s revenues decreased, they did so more gradually than budget analysts originally predicted.
For example, state economists expected corporate income tax revenue to hit a cliff this year. Instead, it remained relatively steady, according to data state analysts presented.
That alone gave the state $380.7 million more to work with.
As retail sales growth slows and business costs increase, analysts say the state could see a major drop-off next year. Corporate income tax is particularly volatile, making it difficult to predict, state economists said.
Sales tax revenue contributed as well, though not as much. The state’s tax on spending brought in $51 million more than expected this year.
At the same time, some taxes, such as those paid by insurance companies on the premiums they earn and taxes on banks’ income fell more than expected.
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