COVID-19 | SC Revenue Forecast
The South Carolina Board of Economic Advisers (BEA) convened virtually for its monthly meeting April 9, 2020, to revise state revenue projections.
Revenue and Fiscal Affairs Office Resources
Key Meeting Points
- The BEA reduced the FY 2019-20 estimate by $507 million to $9,391.2 million, which translates to a revenue decline of 0.1 percent from the prior fiscal year. In essence, the impact of COVID-19 in the last quarter of the fiscal year is expected to eliminate almost all of the revenue surplus previously anticipated for the fiscal year. Fortunately, the state budget for the current fiscal year was adopted before last year’s revenue surplus was known and the revised estimate of $9,391.2 is still above the state’s budget by approximately $40 million.
- The BEA reduced the estimate for FY 2020-21 by $643.5 million to $9,610.6 million. Revenue growth for next fiscal year is now estimated at a much lower 2.3 percent. Pending another update by the BEA, lawmakers now have available recurring funds of $244.2 million and one-time, non-recurring funds of $507.6 million.
- At this time, revenues are not expected to decline to a level that would require cuts to the base budget.
- The assumptions for the revised forecast include an estimated 20 percent decline in national Gross Domestic Product for April through June 2020, and a corresponding impact on South Carolina, but with a partial offset due the federal stimulus funds. Revenue growth for the first six months of next fiscal year is expected to be zero percent with a return to normal growth starting in January 2021. Notably, the estimate is also contingent upon economic and social restrictions being removed around June 1.
- The BEA’s next meeting will be held May 14, 2020