BIG STORY: State to have extra billion in cash in coming year

Staff reports  |  South Carolina economists are expected to announce that state lawmakers will have an extra billion dollars to spend in the 2022-23 budget thanks to federal pandemic relief funds and better-than-forecasted tax revenue collections.  

The state Board of Economic Advisers will release projected revenue numbers during a 1 p.m. meeting on Nov. 10, according to two Statehouse insiders who asked not to be named.

“We’re on a sugar-high,” one analyst observed. “Part of it is due to under-forecasted revenues” because economists widely predicted state revenues to take a big hit because of the coronavirus pandemic. But that didn’t happen. 

While some businesses across the state continue to struggle with revenue shortfalls, they appear to be the exception, as highlighted by a number of trends:

Booming port.  Activity through the S.C. Ports Authority, one of the state’s strongest drivers of economic activity, is at an all-time high thanks to long-term strategic investments that make Charleston’s deep port an attraction to global shippers. “S.C. Ports has the berth availability, cargo capacity and fluidity to handle the record cargo volumes and unprecedented amount of retail imports flowing into the Port of Charleston,” S.C. Ports President and CEO Jim Newsome said last month.

Return of tourism.  Walk the streets of any coastal town and you’ll find crowded restaurants, bars and hotels — a sure sign that tourism is back.

Low unemployment.  The state’s unemployment rate is 4.2 percent now, three times lower than what it was at the peak of the pandemic.  Low rates mean residents are bringing home paychecks and, in turn, boosting local and state tax revenues.

Big surplus.  Not only is $1 billion in extra revenue projected over the next year, but the state also had $1.02 billion in unspent cash at the close of the 2021 fiscal year in June. That gives state lawmakers an enormous pool to make investments in education, roads, health care and more.

Part of South Carolina’s positive cash flow comes from $13.7 billion in federal funding received in recent months.  According to state officials, federal officials have steered to the Palmetto State:

• $8.9 billion through the American Rescue Plan Act, which includes millions to state and local governments as well as funding to help individuals, families, education, child care and transportation.
• $2.7 billion to coronavirus relief through the CARES Act.
• $1.87 billion in other relief appropriations through the CRRSA Act.
• $193.5 million to the Families First Coronavirus Response Act.
• $120.3 million to businesses through the Paycheck Protection Program and Health Care Enhancement Act.
• $10.7 million in other supplemental coronavirus appropriations.
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