When lawmakers return in January for a new legislative session, they likely will claim they will have far less money to spend next fiscal year because of the coronavirus outbreak.
But state government is far from poor, at least judging by agencies’ budget requests for fiscal 2021-22, which starts July 1 – and the hundreds of millions in state reserves.
The coronavirus spread that hit South Carolina in the spring interrupted the budget process for this fiscal year, causing lawmakers to keep base spending levels at last fiscal year’s total $30-billion budget, which includes state, federal and “other” funds.
The state Board of Economic Advisors (BEA) last month announced it had reduced its revenue forecast for this fiscal year by a total of nearly $804 million since February, citing the “impact of COVID-19 and the resulting recession.”
But the BEA in a news release also said that for next fiscal year, the general fund will have “available a significant amount of one-time money,” projecting nearly a total of $1.17 billion in additional revenues, including:
- $182.2 million: estimated “new recurring” general-fund revenues for fiscal 2021-22;
- $103.5 million: fiscal 2018-19 contingency reserve fund;
- $671.5 million: fiscal 2019-20 contingency reserve fund;
- $176.1 million: fiscal year 2020-21 capital reserve fund;
- $36.3 million: projected fiscal 2020-21 general-fund surplus
That extra money doesn’t include huge general and other fund surpluses that state agencies collectively carried over into this fiscal year and likely will be available next July 1. The Nerve in September revealed that 101 state agencies and two major state accounts had at least $4.3 billion in overall “other” fund surpluses as of June 30, and that agencies at the time shared total general-fund reserves of $623.5 million.
General funds are largely made up of individual and corporate income taxes, and state sales taxes. “Other” funds include such things as fees and fines, college tuition, lottery proceeds, state gasoline taxes, and a portion of the state sales tax earmarked for K-12 education.
A bill prefiled Wednesday by state Sen. Tom Young, R-Aiken, would require the state Executive Budget Office to compile other fund balances that state agencies carry forward into the current fiscal year, and to report that information to the Legislature by Nov. 1 annually.
Given the available surpluses and projected revenues for next fiscal year, it’s no surprise that many state agencies want to convince lawmakers to increase their respective fiscal 2021-22 budgets – with plenty of pork mixed in.
Take the S.C. Department of Commerce, for example.
Commerce head Bobby Hitt wants an additional $4 million for the department’s “LocateSC” program, which, as an agency spokeswoman told The Nerve in 2018, funds improvements to land and buildings to develop into “suitable inventory that we can show potential projects.”
Commerce also is requesting $3.7 million more for “closing” fund grants awarded by the state Coordinating Council for Economic Development, which help cover building, road and infrastructure costs of companies wanting to locate or expand in the state.
The Nerve previously has pointed out that the 11-member council, chaired by Hitt and made up of the heads or board chairpersons of state agencies involved in economic development, typically discusses grants in secret.
In addition, Commerce wants $250,000 to “manage” the $65 million “Rural School District and Economic Development Closing Fund,” pushed last year by Gov. Henry McMaster and approved by lawmakers to be used, according to McMaster, “solely, and without exception, for economic development” in rural areas.
“It is expected that this program will take several years to fully implement and longer if additional resources are devoted to the program,” according to Commerce’s written budget request.
Commerce’s total budget is nearly $200.6 million, according to the state Revenue and Fiscal Affairs (RFA) Office. As of June 30, the agency had a collective $220.4 million in general and other fund surpluses, S.C. Department of Administration and state Comptroller General’s Office records show.
For next fiscal year, the S.C. Department of Parks, Recreation and Tourism (SCPRT) is asking for $8.3 million to repair and restore several historical buildings, including the Lace House, at the Governor’s Mansion complex in downtown Columbia.
“Based on SCPRT’s success in managing the Lace House as an event venue during the past 3 years, and given the aesthetic, architectural, and historical qualities of the buildings located on the north side of Venues at Arsenal Hill, the State has a unique opportunity to increase public awareness and usage, and ultimately, optimize their value as tourism assets and event venue rentals,” according to the written budget proposal submitted by agency director Duane Parrish.
The Nerve revealed last year that since McMaster became governor in 2017, SCPRT had received more than $675,000 from renting the Lace House. But the agency refused to disclose who had rented the public building, contending it would be an “unreasonable invasion of privacy” under the state’s open-records law.
SCPRT’s total budget is $136.7 million, according to RFA records. The agency had a total of $59.4 million in general and other fund surpluses as of June 30, Department of Administration and comptroller general records show.
The S.C. Department of Agriculture is requesting $500,000 for next fiscal year to expand marketing of its “Certified SC Grown” brand, which essentially is a state-sponsored advertising campaign for South Carolina farmers and goods producers, as The Nerve has previously reported.
“Because of COVID-19, many South Carolina farms have struggled to continue operations, due to school and restaurant closings,” according to the budget proposal submitted by agency head Hugh Weathers. “With that, many are now having to establish new sales channels.”
The department’s total budget is $52.1 million, RFA records show. The agency had a total of $14.5 million in general and other surpluses as of June 30, according to Department of Administration and comptroller general records.