Difference between revisions of "South Carolina state budget"

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}}{{tnr|limit=2}}This page contains information about '''budget processes and policy issues''' in [[South Carolina]], including:
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}}{{tnr|limit=3}}This page contains information about '''budget processes and policy issues''' in [[South Carolina]], including:
 
* A summary of the budget drafting process
 
* A summary of the budget drafting process
 
* Trends in revenues and expenditures
 
* Trends in revenues and expenditures

Revision as of 09:08, 27 February 2014

South Carolina state budget

Flag of South Carolina.png
Budget calendar:  Annual
Fiscal year:  2014
Financial figures
GF expenses:  $6.7 billion
All funds expenses:  $22.8 billion
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This page contains information about budget processes and policy issues in South Carolina, including:
  • A summary of the budget drafting process
  • Trends in revenues and expenditures
  • Current fiscal year budget developments
  • Financial transparency measures

Between fiscal years 2010 and 2014, the South Carolina state budget has increased by more than $3 billion, from $19.7 billion in 2010 to $22.8 billion in 2014. This represents a 15.7 percent increase, outpacing the cumulative rate of inflation during the same time period (7.95 percent, calculated using the Consumer Price Index).[1]

Budget process

The state operates on an annual budget cycle. The sequence of key events in the budget process is as follows:[2]

  1. In July and August of the year preceding the start of the new fiscal year, the Governor sends budget instructions to state agencies.
  2. In September, agencies submit their budget requests to the Governor.
  3. Budget hearings are held with state agencies in September and October.
  4. In January the Governor submits his or her proposed budget to the state legislature.
  5. Both the House and the Senate pass a budget. If these versions do not match, a conference committee consisting of both House and Senate members is assembled to reconcile the differences.
  6. The legislature must pass a budget with a simple majority by the beginning of the fiscal year, which is July 1. The governor may exercise line item veto power on the enacted budget.[3]

The Governor is constitutionally required to submit a balanced budget to the legislature. In turn, the legislature must pass a balanced budget, and any budget signed into law by the Governor must be balanced.[3]

A rainy day fund, the General Reserve Fund, must maintain a balance equaling three percent of General Fund revenue. Rainy day funds may be withdrawn only for the purpose of covering operating deficits.[4]

Revenues

Breakdown of general fund revenue sources in FY 2013.

The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context).[5] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, FY 2013 ($ in millions)[5]
State Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
South Carolina $2,448 $2,796 $265 $0 $742 $6,251 $1,309.15
Georgia $5,226 $8,486 $706 $0 $3,562 $17,980 $1,799.41
North Carolina $5,309 $10,958 $1,192 $0 $3,100 $20,559 $2,087.62
Tennessee $6,643 $126 $1,083 $0 $3,551 $11,403 $1,755.39
Virginia $3,249 $11,093 $821 $0 $1,259 $16,421 $1,987.92
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.[6]

In fiscal year 2013, personal income tax accounted for approximately 45 percent of all general fund revenues in South Carolina. Compared to the four neighboring states noted above, South Carolina's personal income tax to general fund ratio ranked fourth, behind 47 percent in Georgia, 53 percent in North Carolina, and 68 percent in Virginia.

Revenue trends

The table below details the change in revenue sources in the general fund from 2009 to 2013.[5][7] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, South Carolina ($ in millions)[5][7]
Year Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
2013 $2,448 $2,796 $265 $0 $742 $6,251 $1,309.15
2012 $2,354 $2,592 $212 $0 $700 $5,858 $1,240.20
2011 $2,245 $2,396 $183 $0 $809 $5,633 $1,205.30
2010 $2,191 $2,144 $149 $0 $771 $5,255 $1,133.43
2009 $2,248 $2,327 $207 $0 $762 $5,544 $1,215.46
Change in % 8.90% 20.16% 28.02% N/A -2.63% 12.75% 7.71%
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.[6][8]

Expenditures

Breakdown of expenditures in FY 2013.

The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context).[5] Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.

Total state expenditures, FY 2013 ($ in millions)[5]
State General fund Federal funds Other funds Bonds Total Per capita expenditures
South Carolina $6,350 $7,792 $8,158 $0 $22,300 $4,670.31
Georgia $18,303 $11,752 $10,211 $808 $41,074 $4,110.62
North Carolina $20,602 $17,459 $12,543 $785 $51,389 $5,218.19
Tennessee $12,622 $13,055 $5,394 $382 $31,453 $4,841.92
Virginia $17,691 $9,546 $16,191 $1,167 $44,595 $5,398.65
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.[6][8]

Expenditures by function

Breakdown of expenditures by function in FY 2012.

State expenditures in South Carolina can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures by function, FY 2012 (as percents)[5]
State Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other
South Carolina 15.9% 21.0% 0.4% 21.7% 2.7% 6.6% 31.7%
Georgia 24.0% 18.7% 0.1% 21.5% 3.7% 5.2% 26.8%
North Carolina 23.2% 9.0% 0.5% 24.7% 4.2% 9.9% 28.4%
Tennessee 17.7% 12.8% 0.4% 30.7% 2.7% 6.4% 29.3%
Virginia 16.0% 13.1% 0.4% 16.2% 2.9% 11.3% 40.1%

Expenditure trends

Between 2008 and 2012, state expenditures for elementary and secondary education fell by nearly three percent. Expenditures on corrections and transportation also fell, by 0.3 percent and 0.9 percent respectively. Meanwhile, spending on higher education and Medicaid saw modest increases during the same period. The table below details changes in expenditures from 2008 to 2012.[5][7][9][10][11] Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percents)
Year Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other
2012 15.9% 21.0% 0.4% 21.7% 2.7% 6.6% 31.7%
2011 17.3% 21.0% 0.5% 20.7% 2.5% 5.7% 32.3%
2010 17.1% 20.9% 0.3% 22.6% 2.8% 9.1% 27.0%
2009 17.0% 21.0% 0.3% 23.00% 2.9% 6.9% 28.9%
2008 18.8% 20.6% 0.4% 21.1% 3.0% 7.5% 28.6%
Change in % -2.9% 0.4% 0% 0.6% -0.3% -0.9% 3.1%

State budgets by year

Fiscal year 2014

South Carolina state budget -- 2014
South Carolina State Legislature
Text:A101, R120, H3710
Legislative history
Introduced:March 5, 2013
House:March 13, 2013
Vote (lower house):116-1
Senate:May 28, 2013
Vote (upper house):34-7
Conference:June 19, 2013
Conference vote (upper house):39-5
Conference vote (lower house):54-52
Governor:Nikki Haley
Signed:June 25, 2013

The fiscal year 2014 budget was signed into law by Governor Nikki Haley on June 25, 2013. The $22.8 billion spending plan includes a $6.7 General Fund, $7.6 billion in federal funds and $8.4 billion in other funds (e.g., grants, agency fees, fines, etc.). While the budget easily cleared the state Senate, it passed by only a two-vote margin in the House. The vote was split largely along party lines, with only two House Democrats voting in favor of the budget.[12]

Budget opponents disapproved of the inclusion of tax credits for private school tuition, a lack of expanded Medicaid eligibility, and a failure to institute a cost-of-living wage increase for state employees. Supporters of the budget pointed to allocations for infrastructure improvement and expanded full-day pre-school programs.[12]

Fiscal year 2013

See also: South Carolina state budget (2012-2013)

Fiscal year 2012

See also: South Carolina state budget (2011-2012)

Fiscal year 2011

See also: South Carolina state budget (2010-2011)

Fiscal year 2009

See also: South Carolina state budget (2008-2009)

Historical spending

State budget historical spending below was compiled by the National Association for State Budget Officers. Figures reflect the reported Total Expenditures in Table 1.[5][9]

Historical state budget spending in South Carolina ($ in millions)
Fiscal year General Fund Other funds Federal funds Bonds Budget totals
Total % of Budget Total % of Budget Total % of Budget Total % of Budget
2011-2012 $5,517,000,000 25% $9,284,000,000 42% $7,164,000,000 32.4% $123,000,000 0.6% $22,088,000,000
2010-2011 $5,275,000,000 23.8% $9,821,000,000 44.3% $6,988,000,000 31.5% $104,000,000 0.5% $22,188,000,000
2009-2010 $5,146,000,000 26.1% $7,691,000,000 39% $6,779,000,000 34.4% $86,000,000 0.4% $19,702,000,000
Averages: $5,312,666,666.67 25% $8,932,000,000 42% $6,977,000,000 33% $104,333,333.333 0% $21,326,000,000
General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.

State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, South Carolina had a state debt of over $71 billion. Its state debt per capita was $15,053. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.[13][14]

Total state debt in South Carolina[15]
Type Totals U.S. rank
Total state debt $71,105,557,000 23
Per capita debt $15,053 23
State and other fund expenditures $12,681,000,000 10

Public pensions

See also: South Carolina public pensions and South Carolina public employee salaries

Budget transparency

Transparency evaluation
Searchability Y
600px-Yes check.png
Grants N
600px-Red x.png
Contracts Y
600px-Yes check.png
Line item expenditures Y
600px-Yes check.png
Dept./agency budgets N
600px-Red x.png
Public employee salaries N
600px-Red x.png
Last evaluated in 2009.

South Carolina Spending Transparency is the publicly available website created by the South Carolina government. It discloses information about South Carolina's spending, and is managed by the Comptroller. South Carolina's current Comptroller, Richard Eckstrom, has written extensively on the importance of state and local transparency.[16] In December 2008, he wrote:

"Earlier this year, I worked with Gov. Mark Sanford to create an easy-to-use spending transparency website. It contains detailed spending information for more than 80 state agencies, giving the public more access than ever to information about how state government spends its hard-earned tax dollars. This website, which is available through my office’s site (www.cg.sc.gov), is serving as a national model for other states attempting their own transparency initiatives. Several states have contacted me hoping to duplicate our open-government ideas."[16]

Government tools

See also: Evaluation of South Carolina state website

South Carolina Spending Transparency provides a searchable expenditures database.[17]

The table to the right is helpful in evaluating the accessibility and scope of the information provided by the South Carolina Spending Transparency page.

Support for creation of the database

Governor Mark Sanford signed South Carolina Executive Order 2007-14 on August 30, 2007. The order required the Comptroller to compile and disclose information concerning how the state agencies of South Carolina allocate revenues.

Exempted accounts

In 2012, 13 state agencies pushed to make 65 separate accounts exempt from oversight, meaning that the money in those accounts could only be reviewed by people inside the agency. Agencies are allowed to apply for such status with the Budget and Control Board if "release of the information would be detrimental to the state or agency."

Multi-measure budget transparency profile

The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for South Carolina, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.[18][19]

IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. South Carolina tied for eighth in the nation with 11 other states, earning six out of eight possible points.[20]

South Carolina - IGPA score for budget process, contents and disclosure
Budget transparency indicator Yes or no?
Performance measures
{{{1}}}
"Generally Accepted Accounting Principles" budget N
600px-Red x.png
Multi-year forecasting
{{{1}}}
Annual cycle
{{{1}}}
Binding revenue forecast N
600px-Red x.png
Legislative revenue forecast
{{{1}}}
Non-partisan staff
{{{1}}}
Constitution or statutory tax/spend limitations
{{{1}}}
TOTAL 6

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[20]

Accounting principles

See also: South Carolina government accounting principles

The South Carolina State Auditor performs financial audits of state agencies, the annual financial audit of the State's General Purpose Financial Statements, and the annual Single Audit of the State's Schedule of Expenditures of Federal Funds. The audit reports are published online.[21]

The Institute for Truth in Accounting (IFTA) rates South Carolina “timely” in filing the state’s Comprehensive Annual Financial Report (CAFR) -– the annual financial report of state and local governmental entities. IFTA rated 22 states "timely," 22 states "tardy," and 6 states as "worst." IFTA does not consider South Carolina's CAFRs, and those of the other states, to be accurate representations because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[22] South Carolina's CAFRs are annual publications of the South Carolina Comptroller General, the state's top accountant. The Comptroller General is responsible for supervising state spending, keeping the state's books and maintaining accounting controls over state agencies. Richard Eckstrom has served as Comptroller General since 2002.[23]

Credit ratings

States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit ranking indicates lower risk for an investor, which in turn lowers costs for taxpayers.[24]

The table below lists the Standard and Poor's credit ranking for South Carolina from 2001 to 2012 (grades from surrounding states are provided for additional context).[24]

S&P credit ratings from 2001 to 2012
South Carolina Georgia North Carolina Tennessee Virginia
2012 AA+ AAA AAA AA+ AAA
2011 AA+ AAA AAA AA+ AAA
2010 AA+ AAA AAA AA+ AAA
2009 AA+ AAA AAA AA+ AAA
2008 AA+ AAA AAA AA+ AAA
2007 AA+ AAA AAA AA+ AAA
2006 AA+ AAA AAA AA+ AAA
2005 AA+ AAA AAA AA AAA
2004 AAA AAA AAA AA AAA
2003 AAA AAA AAA AA AAA
2002 AAA AAA AAA AA AAA
2001 AAA AAA AAA AA AAA

Federal aid to state budget

See also: Federal aid to budgets in the 50 states

The chart below represents how much of the state’s budget comes from the federal government. The number in parentheses is the corresponding ranking in relation to the rest of the nation (e.g., if "1", the state receives the highest percentage of federal funding in the nation):

Federal aid to state budgets in 2012
State Federal aid as % of general revenue National rank
South Carolina 32.45% 29
Georgia 38.06% 7
North Carolina 33.24% 26
Tennessee 41.02% 3
Virginia 23.53% 48

Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue.[25]

Stimulus

South Carolina received $4.39 billion in federal stimulus funding between February 2009 and June 2013.[26]

External links

See also

References

  1. Bureau of Labor Statistics "Consumer Price Index," accessed February 24, 2014
  2. National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting," updated April 2011
  3. 3.0 3.1 National Association of State Budget Officers "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  4. SC Budget and Control Board "State Budget - FAQ," accessed February 21, 2014
  5. 5.0 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
  6. 6.0 6.1 6.2 United States Census Bureau "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
  7. 7.0 7.1 7.2 National Association of State Budget Officers "State Expenditure Report, 2009-2011," accessed February 24, 2014
  8. 8.0 8.1 United States Census Bureau "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
  9. 9.0 9.1 National Association of State Budget Officers "State Expenditures Report, 2010-2012," accessed February 24, 2014
  10. National Association of State Budget Officers "State Expenditure Report, 2009," accessed February 24, 2014
  11. National Association of State Budget Officers "State Expenditure Report, 2008," accessed February 24, 2014
  12. 12.0 12.1 The Times and Democrat "S.C. General Assembly passes 2013-2014 budget compromise," June 20, 2013
  13. State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  14. Washington Examiner "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
  15. State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  16. 16.0 16.1 The Herald-Journal "Urge local governments to put spending information online," December 28, 2008
  17. South Carolina Spending Transparency Database "Home page," accessed February 21, 2014
  18. Institute of Government and Public Affairs at University of Illinois "Home page," accessed February 21, 2014
  19. Institute of Government and Public Affairs at University of Illinois "South Carolina: Budget Transparency Profile," September 2011
  20. 20.0 20.1 Institute of Government and Public Affairs at University of Illinois "Budget Transparency Profiles - All 50 States," September 2011
  21. South Carolina Office of the State Auditor "Home page," accessed November 11, 2009
  22. Institute for Truth in Accounting “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  23. South Carolina Comptroller General "Home page," accessed November 11, 2009
  24. 24.0 24.1 Stateline: The Daily News Service of The Pew Charitable Trusts "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  25. United States Census Bureau "State Government Finances: 2012," accessed February 24, 2014
  26. Recovery.gov "Stimulus Spending by State," accessed February 21, 2014