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:
- South Carolina has recovered 70 percent of job losses since the beginning of Covid-19 but expects the remaining jobs to return slowly
- Anticipate returning to pre-pandemic employment levels in February 2022
- Expect wage growth and proprietor’s income to grow but at slower than historical rates
- Current assumptions do not anticipate any new federal stimulus
2020-21 Forecast: Gross 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 budget. The 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