State Funding Update

The Board of Economic Advisors (BEA) recently met to update the state’s General Fund forecast for this fiscal year and release the preliminary estimate for the 2021-2022 fiscal year. Based on sales, tax, and employment data, forecasters outlined the following assumptions:

  1. South Carolina has recovered 70 percent of job losses since the beginning of Covid-19 but expects the remaining jobs to return slowly
  2. Anticipate returning to pre-pandemic employment levels in February 2022
  3. Expect wage growth and proprietor’s income to grow but at slower than historical rates
  4. Current assumptions do not anticipate any new federal stimulus

2020-21 ForecastGross General Fund revenue is now forecast at $9.45 billion. This estimate was reduced by another $50 million from the August estimate of $9.50 billion (the August estimate reduced the forecast $52.1 million from the May estimate of $9.55 billion). For reference, in February of this year, the BEA predicted General Fund revenue of $10.25 billion for FY 2020-21. Although the new adjustments downgrade the forecast, the new forecast would remain $36.3 million above the FY 2020-21 budgetThe state also still has an $811 million one-time surplus. The legislature will have to option to approve an FY 2020-21 spending plan when they return in January or can choose to continue to operate under the current Continuing Resolution and pass a new budget for the 2021-22 fiscal year.

Preliminary 2021-22 Forecast: Gross General Fund revenue is expected to grow slightly to $9.61 billion (a 1.7% percent increase from FY 20-21). This growth is predicted to equate to approximately $182.2 million in additional recurring funds. There is still expected to be nearly $1 billion in one-time funds that should be available ($987.4 million). This forecast will be updated in February.

The full report from the BEA can be found here.  BEA UPDATE