GREENVILLE, S.C. (WSPA)- The South Carolina Board of Economic Advisors met Thursday to look at the projected tax revenue for the next year. They’re expecting stalled growth and a loss of hundreds of millions of dollars in state tax revenue.
Before Covid-19 hit, South Carolina was expecting economic growth and state budget surpluses. Now, much of the Palmetto State’s economy is at a standstill. According to notes from Thursday’s meeting, the state Board of Economic Advisors projects revenue growth to slow and nearly all of this year’s expected budget surplus to be wiped out.
“The hospitality industry’s being affected and other major businesses are being affected, so the growth that we had anticipated not only for these next three months, but for the next 12 or 15 months, is not going to happen,” said Frank Rainwater, who is the executive director of the South Carolina Revenue and Fiscal Affairs Office.
The board still projecting some growth over the next year.
“The forecast for the coming fiscal year, which the General Assembly was working on the budget basically now assumes we’ll have little or no growth through the Summer and Fall,” Rainwater said. “But hopefully we will return to normal growth beginning in January of 2021.”
Despite the estimated budget for this year dropping by more than $500 million because of Covid-19’s impact, state leaders stay there is still enough money to cover the budget.
“This revised forecast anticipates a very small surplus for the fiscal year,” Rainwater said. “It is not expecting any kind of budget cut for the current fiscal year.”
The forecasts depends several assumptions: that economic lockdown will be lifted in June and that there won’t be a second wave of infections in the Fall .
“The hope is we won’t have to raise taxes, but we’ll be able to sustain the businesses in South Carolina will be hefty budget wise once again,” said S.C. Sen. Karl Allen.
The state Board of Economic Advisors will be making another projection on May 14.