COLUMBIA, S.C. (AP) - South Carolina’s governor wants lawmakers to simply copy and paste last year’s spending plan for the current budget year, asking state agencies to prepare for possible cuts if the economy continues to struggle amid the COVID-19 pandemic.
The roughest of estimates by state economists say South Carolina may collect a little extra money in the fiscal year that started July 1. If that happens, the state should bank it until the COVID-19 uncertainty eases, Gov. Henry McMaster told his Cabinet on Thursday.
“The $1.8 billion revenue surplus we had estimated evaporated almost overnight,” McMaster said.
Lawmakers said they will listen to the governor’s request, but aren’t committing to anything yet.
With schools starting back, South Carolina faces a critical point in both its economic recovery and its COVID-19 response. After two months of first rising COVID-19 cases, then a spike in deaths, the numbers have finally taken a turn downward.
South Carolina is now averaging less than 800 new cases a day, the lowest level since mid-June when a massive increase in cases experts blamed on a lack of mask rules, reopening businesses and Memorial Day parties.
At the mid-July peak, the state was seeing a seven-day average of nearly 2,000 cases a day, according to the state Department of Health and Environmental Control.
The number of COVID-19 deaths is declining, but at a much slower rate. South Carolina has averaged at least 30 deaths a day for the past month.
And the percentage of tests that come back positive remains high, almost always above 10%. That could indicate a level of undetected cases that could emerge as schools reopen and more people come together,
On Friday, South Carolina announced the July unemployment rate was 8.6%, down slightly from the 8.7% rate in June and much lower than the 12.8% April rate after the pandemic shutdown.
But the state’s unemployment rate was just 2.4% at the start of 2020 and before the pandemic, had not been above 8.6% since November 2012, when South Carolina and the nation were climbing out of the Great Recession.
In early March, the South Carolina House, flush with predictions the state’s rapidly expanding economy would continue to rain extra revenue into tax accounts, passed a 2020-2021 budge t with raises for teachers, security upgrades for prisons, tax breaks and rural road repairs.
Less than a week later, the COVID-19 pandemic started and that spending plan was scrapped. Lawmakers in May passed a resolution to keep spending at the levels in last year’s $9.4 billion spending plan in the new budget year starting July 1 - a move aimed at buying time until a new budget could be crafted at a special session in September.
That session is now three weeks away. Senate Finance Chairman Hugh Leatherman on Monday sent a letter to committee members, who will meet online because of COVID-19.
“We must plan for the worst and hope for the best,” the Florence Republican wrote.
State economists plan one more estimate at the end of the month on how much the state should have to spend. Their current best guess is about $161 million in additional revenue for the 2020-2021 budget year, but they acknowledge COVID-19 means that number could be considerably off in either direction.
McMaster held Thursday’s Cabinet meeting virtually as well. From 25 boxes, South Carolina agency leaders gave three-minute updates, with a bell ready to chime when time was up.
The governor thanked them for their work.
“I think we did things just right in a careful, smart deliberate way,” McMaster said, briefly interrupted by someone who didn’t mute their microphone. “I’m confident that the end is in sight and South Carolina will bounce back and bounce back stronger than before.”
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