Outlook gloomy for S.C. finances
Action expected to trigger more spending cuts
By Yvonne Wenger
COLUMBIA — The state's top economic forecaster used the gloomiest words and a sober tone Friday to describe South Carolina's financial outlook.
The Board of Economic Advisors is expected to lower the state's revenue forecast by at least 4 percent, a threshold that would trigger a special session for the Legislature to cut government spending.
Any cut by the board would be in addition to a 2 percent reduction that's already been made, meaning a total of at least a 6 percent adjustment off the budget the Legislature passed in June.
And the situation isn't expected to get better any time soon.
Previous stories
Sanford-Legislature feud boils; Lawmakers don't trust governor, McConnell says, published 09/12/08
Agencies detail budget concerns; Sanford using directors to pressure lawmakers, published 09/10/08
"Everyone is on notice: no good news coming," board Chairman John Rainey said. "Government is going to get smaller."
The board is scheduled to meet again Oct. 8, after the close of the fiscal year's first quarter, to assess the damage and set a new revenue forecast.
"These numbers have fallen off the cliff," Rainey said.
-- Revenue is off by $48.2 million for the first two months of the fiscal year. That includes drops of more than $23 million less in sales tax, nearly $12 million in individual income taxes and about $2.5 million in corporate income taxes.
-- Consumer sentiment has plummeted and is worse now than right after the Sept. 11, 2001, terrorist attacks and Hurricane Katrina in 2005.
-- A total of 50,000 people fill the unemployment rolls, wiping out a normal year's worth of job growth.
-- Housing permits fell 25 percent compared with this time last year, a valuable source of government money.
-- Food stamp use jumped 16 percent, seen as an early indicator of trouble because it is one of the easiest social welfare programs to sign up for.
"The numbers speak for themselves without the doomsday-sayers," Rainey said.
Reason for optimism does exist, though, he said. Comparing the economic outlook today with that of downturns in 1987, the early '90s or 2000s, he said things are better now because South Carolina's economy is more diverse and people have higher wages.
"You can make yourself sick by worrying about being sick," Rainey said.
To put the gravity of the situation in perspective, Wall Street is screaming for a national bailout, South Carolina's unemployment is higher than it has been in 15 years at 7.6 percent and average Americans are relying on their credit cards to make it through the hard times.
That all sets the stage for the Legislature's return. Whether that will happen before Election Day is not clear.
Senate President Pro Tem Glenn McConnell and House Speaker Bobby Harrell, both Charleston Republicans, said Friday they would discuss when to call the Legislature back after the economic advisors' meeting next month. A special session is expected to last about two weeks.
Conversations between the state's lead budget writers and Gov. Mark Sanford's office are beginning. Sanford, McConnell and Harrell all agree that it would be prudent to have a compromise in place before the Legislature returns.
The state's reserve funds were tapped earlier this year to accommodate the 2 percent cut ordered by the Board of Economic Advisors. Meanwhile, state agencies were told to lose another 3 percent from their budgets to help address what looked like a worsening situation.
"These are difficult times and it doesn't look likely they'll get a lot better quickly," Rainey said.
E-mail this story
Printer-friendly versionComments
whome (anonymous) says...
"I have no doubt our state will lead the nation into the coming depression and will be the very last state to recover from it."
------------------
California and Florida are at least one year ahead of us. You can't believe how bad those states are. For awhile agriculture was keeping revenue from "falling off the cliff," but alas, those prices have come down as well.
I can't repeat this point enough. Consumer discretionary spending is DEAD.
September 27, 2008 at 8:09 a.m. ( permalink | suggest removal )
zoomru (anonymous) says...
MY BACKSIDE ...........!!
Bill Walsh is a better forcaster !~!!!
WHAT ??
The state's top economic forecaster... WELL ?? Who is it ??
Is it ...board Chairman John Rainey ?????
WE WANT TO KNOW !!!
QUOTE :!!!.....
"Everyone is on notice: no good news coming," board Chairman John Rainey said. "Government is going to get smaller."
Government ...SMALLER ?!! That's great NEWS !!! He needs to start at the Dept of EDUCATION !!!!!
MY BACKSIDE !!!!
WE ARE WINNERS !!!! WINNNERS !!!!
This guy wouldn't see Opportunity if it was TATTOOed on his
....FACE !!!!!!
Does he have any idea where this state is positioned ??!!
If our Legislators are listening to this LOSER; then GOD help US !!!!!
September 27, 2008 at 8:19 a.m. ( permalink | suggest removal )
zoomru (anonymous) says...
JOHN RAINEY..........
Stop reading tea leaves and TAROT cards !!
Get out from under your DESK and drive around OUR state !!!
So what .....that the newspapers in this state are consolidating!! Is that the END OF THE WORLD !!!
YOU need to get a CLUE !!!
Just because there is less tax revenue trickling into Columbia doesn't mean that WE are NOT working !!!
September 27, 2008 at 8:22 a.m. ( permalink | suggest removal )
oldglory (anonymous) says...
I recently read that state legislators in Virginia have begun stepping forward to offer a reduction in their salaries due to the economic short-fall in the state budget. Hooray! that they seem to realize it's their responsibility as well.
I fear in our case that the state will have to get in line behind Berkeley County and it's lil boo-boo with the ARM that citizens are expected to pay for out of their pockets.
Actually, I'm still trying to figure out how the U.S. Government which robs Peter to pay Paul (leaving deficits all over the place) can bail out the citizens who will have to pay back the government. No word at all of charging or firing the 'experts' who were running the government scams. It scares me to think those in charge do not understand the basics of 2 + 2 = 4 and not 10!
The U.S. Government many years ago 'borrowed' money from Social Security to shore up some deficit. That money was not returned to Social Security, and for quite a few years now, the people who contribute to that have been told there will be no funds for them. Why did this happen?
September 27, 2008 at 8:39 a.m. ( permalink | suggest removal )
USC_Alumni (anonymous) says...
It's a sign of the times. Nation wide private and public entities are scaling back and trying to deal with the economic fallout.
What's happening to this country starts at the top. There is no need to look any further than the Republican White House and all the corporate friendly legislation they passes when they where in controlled of The House and Senate.
How do y'all fell about the Republican Contract with America now? We all know who got the bad end of that contract.
September 27, 2008 at 9:46 a.m. ( permalink | suggest removal )
steve (anonymous) says...
Welcome to my economic world. I have this feeling that the only reason the Government is taking any action is because the fools in charge, and their good buddies, have finally felt the economic pinch. Solution - Let's cut our losses - no wait let's have the next administration and the tax payers cover our losses.
The only positive I can see is that everyone is being hit in the pocketbook and credit cards. Welcome to the club y'all.
September 27, 2008 at 10:41 a.m. ( permalink | suggest removal )
iceman1978 (anonymous) says...
You know, one thing that South Carolina could do is consider legalized gambling to generate revenue. Now before you get this image of having Myrtle Beach turning into Atlantic City, hear me out.
If they could regulate it to where gambling casinos would be limited in scope and architectual design, they could make it work. What if they could build a place that was tastefully done, elegant, and restricted as such that the house minimum would be $500 a hand? The casino at Monaco is like this. It's frequented by the super-rich and generates money for Monaco to pay its bills.
What if they could have that kind of establishment at Kiawah, Hilton Head or downtown?
No flashing neon lights, no slot machines everywhere, just something tasteful that could help bring in revenue. If Kiawah were able to offer gambling, it might actually boost tourism. This country, to my knowledge, doesn't yet have a casino that is in the same league as the casino at Monaco. (Well, maybe the Bellagio)
September 27, 2008 at 11:21 a.m. ( permalink | suggest removal )
guidedbystewart (anonymous) says...
SC lacks well paying job growth....Growth in just the service industry sooner or later will catch up to you, surprise, surprise!
September 27, 2008 at 12:58 p.m. ( permalink | suggest removal )
803scdantes (anonymous) says...
Right...it's the Republican's fault that South Carolina is in recession? What about Michigan's economy? That state has been run by Democrats for years and is in the middle of a bigger recession than South Carolina, but I don't hear Spankerbuns crying about how the stupid Michiganians deserve the recession their state is facing. Nor do I hear Spankerbuns lamenting the stupid Democratic voters who voted in Democratic candidates in Chicago, Washington D.C., New Orleans, where these cities have high crime rates, high drop out rates, and high unemployment. Those problems must be the Republican president right? Of course, when Republicans are in local office when a recession hits, its the local Republican's fault, when Democrats are in local offices when the recession hits their governments, its clearly someone else's fault. Nice logic Spankerbuns. Your pathetic attempt to defend the Democratic party is well noted. Sanford has been screaming for years about controlling spending. The problem in South Carolina is not the Republicans, but the Republican and Democratic "good ole boy" network that disregarded Sanford's attempts to control spending in the good times to save money for the bad times. You're precious democratic party was in on the veto over-rides there Spankerbuns. I'm more upset with the entire legislature than any particular party.
September 27, 2008 at 4:19 p.m. ( permalink | suggest removal )
buff_o_rilla (anonymous) says...
Its amazing to me that this country was doing fine till the Democrats took control of congress.
September 27, 2008 at 6:16 p.m. ( permalink | suggest removal )
outrage (anonymous) says...
Buff - Good point!
USC - "the contract with America" was in 1994. The Dems control congress right now.
September 27, 2008 at 7:20 p.m. ( permalink | suggest removal )
Postandcourier.com is pleased to offer readers the enhanced ability to comment on stories. We expect our readers to engage in lively, yet civil discourse. Postandcourier.com does not edit user submitted statements and we cannot promise that readers will not occasionally find offensive or inaccurate comments posted in the comments area. Responsibility for the statements posted lies with the person submitting the comment, not postandcourier.com. If you find a comment that is objectionable, please click "report abuse" and we will review it for possible removal. Please be reminded, however, that in accordance with our Terms of Use and federal law, we are under no obligation to remove any third party comments posted on our website.
Users can now build user-to-user connections, follow friends' recent posts, add an avatar that fits their personality, and more. If you have posted here before you'll need to sign up again, or if you've never posted before, start now by signing up!
Full terms and conditions can be read here.
Thank you for your interest in this story. The comment thread for this article has been closed.
- Most Commented
- Most Emailed
- Image questions for The Citadel
- New place to play planned for Folly
- Man killed, two others injured in Mt. Pleasant
- German firm to open area factory
- Protesters coming here
- Logistics company to add 500 jobs in Berkeley County in next five years
- Defying expectations
- Energy initiative to expand
- 500 jobs coming to Berkeley
- Francois credited with helping police investigation
