SC lawmakers to have $3B more to spend next year due to stimulus, economists predict
South Carolina lawmakers are expected to have more than $3 billion of additional money available to spend next year, according to new estimates from the Board of Economic Advisors.
The state finished the 2021 fiscal year — which ended June 30 — with a $1 billion surplus. And, next year, state economists estimate South Carolina will end the year with a $987 million surplus.
In total, the Board of Economic Advisors estimates the state will have nearly $2.2 billion of one-time cash available to spend out of a roughly $10.8 billion spending plan when the Legislature returns in January. Economists also estimated the state will have $897 million in new annual dollars, used to pay for ongoing expenses, such as services, health care costs and salaries.
Lawmakers had a surplus because they kept spending levels the same for the 2020-21 fiscal year when they chose not to pass a budget due to COVID-19 economic uncertainties.
The economy did better than projected, and taxes and fees that make up the budget came in at 20% higher than projected, economists said.
“The way the pandemic played out with the federal spending and other factors, revenues did not fall as we thought were possible as there would be in a normal recession,” said Frank Rainwater, head of the Revenue and Fiscal Affairs Office.
Rainwater did caution that the effects of the federal stimulus used to offset the economic slowdown of the COVID-19 pandemic are still working their way through the economy, and the revenue growth trends are expected to level out.
“We still believe that we’re going to come back off of this stimulus high, even though we’re running so far ahead,” Rainwater said.
Rainwater said estimates show that income tax withholdings will continue to rise in the state as wages have increased.
“Wage growth has been forced up,” Rainwater said. “Companies are just having to pay more to hire workers and the demand of the tech field. There’s been a lot of pressure on wages to find people and retain people. We don’t think that’s going to fall back.”
Lawmakers won’t decide until months from now how they’ll spend the money, though they’re likely to spend $350 million as part of the Port of Charleston’s $550 million project to create barge operations and near dock railroad access. Legislators covered $200 million for the project in the last budget.
And Gov. Henry McMaster has already proposed how he wants some of the money to be spent, including $300 million to build Interstate 73 from Interstate 95 to Myrtle Beach.
McMaster will unveil his spending wish list in January.
This story was originally published November 11, 2021 at 11:50 AM with the headline "SC lawmakers to have $3B more to spend next year due to stimulus, economists predict."
