South Carolina

South Carolina's governor submits the annual budget to the General Assembly in January as the basis for enactment of an appropriation bill, effective for the fiscal year beginning July 1.

The state constitution requires that budget appropriations not exceed expected revenues. A General Reserve Fund (equaling three percent of General Fund revenues) is maintained to cover operating deficits. In addition, approximately 25% of projected revenue growth is set-aside and may be used as a surplus at the end of the fiscal year. Many tax revenues are earmarked for specific purposes and are deposited in accounts other than the general fund: all gasoline taxes and related charges are designated for highways, and a portion of the sales tax goes directly to public education. In addition, public education accounts for more than half of all general fund expenditures. The state shares tax collections with its subdivisions (counties and municipalities), which determine how their share of the money will be spent.

For 1999/00, the total state budget for South Carolina was $13 billion, of which $4.9 billion came from general funds and $3.5 billion came from federal funds. General fund revenues for 2000/01 actually came to over $5 billion, but expenditures reached $5.5 billion, a gap that was largely covered by a starting balance of $573 million from the previous year. In 2001/02, however, general fund revenues fell to $4.93 billion. The government met the shortfall with across-the-board cuts and drawings on its rainy day fund. A total of $326.4 million was cut from the budget after it was enacted. In 2002/03, general fund revenues reached only $5.01 billion. Cuts in the budget totaled $416.6 million with only the debt service and capital reserve funds exempted. More drawings were made on the South Carolina's rainy day fund. The budget deficit for 2002/03 was estimated at 6.1% of the state budget, and was projected at 13.6% of the budget for 2003/04. Its starting balance in 2000/01 had been 3% of expenditures. In 2002/03 the starting balance was only 0.8% of expenditures. Total appropriations of the state budget include approximately 35% to health and social projects, 20% to primary and secondary education, 19% to higher education, 7% to transportation, and 6% to correctional institutions and public safety.

The following table from the US Census Bureau contains information on revenues, expenditures, indebtedness, and cash/securities for 2001.