Editor’s note: This is the first investigative story in a two-part package on massive state financial accounts. The other story can be found here.
S.C. lawmakers don’t talk much publicly about this part of the state’s coffers, though it’s a huge chunk of money.
Known as “other” funds, the revenues include such things as college tuition, lottery proceeds, state gasoline taxes, part of the state sales tax earmarked for K-12 education, and court fees and fines. Many state agencies don’t spend all of their available other funds in a fiscal year, with some of them ending the year with relatively large surpluses.
As of a month ago, the state had a total of more than $9 billion in other fund reserves, The Nerve found in a review of S.C. Department of Administration records obtained under the state Freedom of Information Act.
That amount, which was as of April 18, works out to be approximately $1,700 for every man, woman and child in the state.
In comparison, the state ended fiscal 2021 with $5.6 billion in total other-fund surpluses, as The Nerve revealed then.
The 2023-24 fiscal year runs from July 1, 2023, through June 30 of this year. The Nerve’s latest review found that other fund surpluses among 104 state agencies or major divisions, plus two separate state funds for county road projects and state employee benefits, collectively totaled $8 billion to start this fiscal year, growing to a total of $9.3 billion last month after cash receipts and payments, along with listed “net” transfers, were taken into account.
The overall figures don’t include $2.91 billion as of last July 1 or $3.27 billion as of April 18 this year in collective other-fund balances with the state Treasurer’s Office, according to Department of Administration records. The Nerve today has a separate investigative story on a disputed $1.8 billion state account managed by the Treasurer’s Office.
The Nerve’s latest review also found that a special joint legislative panel that had been recommending whether to approve mid-year requests by state agencies to increase their other fund spending was discontinued about four years ago after 10 years in existence.
For this fiscal year, lawmakers approved a total of nearly $14 billion in other fund spending, which represents more than a third of the $41 billion total state budget. For the 2024-25 fiscal year, the House and Senate have proposed $14.1 billion and $13.3 billion, respectively, in other fund spending.
A legislative conference committee is expected to work out differences between the House and Senate versions of the state budget for the fiscal year that starts July 1.
Fat piggy banks
Excluding the Treasurer’s Office, The Nerve’s review found that state agencies with at least $1 billion in other fund reserves as of July 1, 2023, or April 18 this year included the departments of Transportation and Health and Human Services, as well as the University of South Carolina’s Columbia campus. Twenty state agencies had other fund surpluses of at least $100 million as of April 18.
Among agencies that listed surpluses at the start of this fiscal year, the Commission on Prosecution Coordination had the lowest total reserves – $10,094, according to Department of Administration records. The median, or midway point, of surpluses among all agencies as of last July 1 was $6.9 million.
In a written response last month to The Nerve, Department of Transportation spokeswoman Kelly Moore said DOT's total other-fund reserves ($1.96 billion as of last July 1, $2.04 billion as of April 18) were comprised mainly of the Infrastructure Maintenance Trust Fund, Highway Fund and non-federal aid funding.
“The cash balance we have coincides with the contract commitments we have made for engineering and construction contracts,” Moore said.
The Nerve in January reported that the department has continued to move slowly with repaving or rebuilding bad roads and bridges statewide with money from the Infrastructure Maintenance Trust Fund (IMTF), created with a 12-cent-per-gallon, or 75%, hike over six years in the base state gasoline tax. The increase took effect on July 1, 2017, as approved by lawmakers.
The Nerve’s January story noted that the cash balance in the IMTF as of last Nov. 30 was $1.41 billion. The surplus as of April 30 this year was $1.51 billion, according to the state Comptroller General’s Office.
In an April 26 written response, Health and Human Services spokesman Jeff Leieritz told The Nerve that the agency’s $1.15 billion other-fund reserves as of last July 1 and April 18 included about $387 million that has “already been committed to projects that have not been fully paid out as of today.”
“The vast majority of this one-time funding will be invested in the state’s healthcare infrastructure to address identified gaps in the state’s behavioral healthcare system and improve access to care in rural and underserved areas of South Carolina,” he said.
Medicaid enrollment in South Carolina increased from 1.04 million in February 2020 to 1.34 million full-benefit members in May 2023 – an approximately 30% jump, Leieritz said, adding that full-benefit membership as of last month was about 1.17 million.
USC spokesman Jeff Stensland in a written response last month to The Nerve said he couldn’t comment on the Department of Administration’s other-fund-surplus figures for the university’s main campus because “we have no context for what they pulled so far.”
Department of Administration records show the university’s main campus had other fund surpluses of $738.5 million and $1.22 billion as of last July 1 and April 18, respectively. In comparison, Clemson University had other fund reserves of $279.9 million and $221.8 million on those respective dates.
Stensland didn’t respond to a question about why the university maintains relatively large other-fund surpluses annually. Clemson spokesman Joe Galbraith didn’t provide an explanation on Clemson's numbers when asked last month by The Nerve.
Oversight lacking?
Asked about specifics on mid-year transfers into other fund accounts, the Department of Administration in a written response last month said: “We are not able to provide information on where those transfers come from. Each agency would have to provide the documentation for each transfer into or out of a fund.”
The Nerve’s review found a total of $745.6 million in “net” transfers among the 104 state agencies or divisions and two separate state funds as of April 18.
The Department of Administration wasn’t alone in being unable to provide certain details of agencies’ other-fund accounts. When asked, for example, about current surpluses in those accounts, the S.C. Treasurer’s Office in a March written response referred The Nerve to the state Comptroller’s General Office, which, in turn, directed The Nerve to the Executive Budget Office within the Department of Administration.
Under state law, lawmakers must appropriate “all anticipated federal and other funds for the operations of state agencies,” which are required to provide to the governor, as part of their budget submissions, "detailed statements of the sources of all federal and other funds contained in their budgets.”
For the 2010-11 fiscal year, lawmakers created the joint, eight-member “Other Funds Oversight Committee,” made up the Senate Finance Committee chairman or his designee, the House Ways and Means Committee chairman or his designee, two other members of those budget-writing committees, and the majority and minority leaders of their respective chambers or their designees.
The committee was authorized to review all mid-year, other-fund-increase requests by state agencies and make recommendations to the state budget office, as The Nerve previously reported.
For 10 years, the committee operated under annual state budget provisos, though it was discontinued in the fiscal 2020-21 budget year, records show.
“They have not met in several years,” Senate Clerk Jeff Gossett confirmed in a recent email to The Nerve.
The Nerve last week asked the Department of Administration, under the Freedom of Information Act, for any mid-year, other-fund-increase requests since July 1, 2021, submitted by state agencies to the Executive Budget Office, as had been done in previous years.
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Brundrett is the news editor of The Nerve (www.thenerve.org). Contact him at 803-394-8273 or
