Gov. Nikki Haley has $440.5 million in “new” money to spend in next year’s state budget – and more than $1.2 billion in new requests on how to spend that cash.
The state Board of Economic Advisors released Monday its first revenue forecast for the state’s fiscal year that starts July 1, telling Haley how much money the state will have to spend as she is preparing her third executive budget.
Haley’s budget plan is the first step in the months-long legislative process that will decide how to spend more than $7 billion in state tax dollars. The state Legislature will prepare its version of the budget in the spring.
The new money is a mix of $92.7 million in one-time money and $347.8 million in state revenue that economists say the state can expect to be recurring.
A Haley spokesman called the forecast “a clear indication that South Carolina’s economy continues to recover and grow stronger under Governor Haley’s leadership,” adding the governor will unveil her executive budget plan “at the beginning of the year.”
“With unemployment in South Carolina at a 5-year low, we see continued slow and steady growth over the next 20 months,” said Economic Advisors chairman Chad Waldorf, a Haley appointee.
Last month, state agencies submitted more than $1.2 billion in requests for new spending in the 2014-15 budget.
Those requests include $1.4 million for four new state judges, $10 million to put toward the purchase of a new statewide voting system and $17 million for the Department of Commerce to use to lure businesses to South Carolina.
Sen. Hugh Leatherman, R-Florence, chairman of the Senate Finance Committee, said Monday’s revenue increase was more than he had expected.
But, he added, the state always has more requests for new spending than new money available to spend. For example, the state Department of Health and Human Services has requested $155 million just to keep up with growth in the state’s Medicaid insurance program for low-income or handicapped South Carolinians.
There is “nothing we can really do about” those higher costs, Leatherman said. “That will take a good chunk of money off the top.”
From July to October, South Carolina has collected about $44.5 million more in taxes than expected.
Year to date, sales tax collections have been up 4.6 percent compared to last year, or $28 million, while income tax collections have been up 4.3 percent, or $58.7 million. Corporate income taxes have been down 8.6 percent. But that is better than analysts had expected.
Corporate income taxes were up 53 percent last year. State economists had predicted those taxes would fall by 18 percent this year. However, the better numbers prompted board members to add an additional $18 million to their forecast of corporate income taxes.
Reach Beam at (803) 386-7038.