State Budget Practice Report Cards and Budget Resource Guide
South Carolina was the lone state among the eight in the South Atlantic region to average a D, the second-lowest possible grade, in legacy costs for fiscal 2017 through 2019. Its public employee pension was only 55 percent funded in 2018, 15 percentage points below the total for all states but slightly better than in past years. The state does not provide annual funding for other postemployment benefits (OPEB), principally health care, on a similar basis.
In transparency, South Carolina averaged a C, largely because its budget documents do not include consolidated information on tax expenditures. This is a shortcoming in a state with a longstanding reputation for aggressive economic development efforts. Additionally, like all but five states (as of 2019), South Carolina did not disclose deferred infrastructure maintenance costs.
It performed better in the remaining categories, posting top A averages in budget maneuvers and budget forecasting and a B in reserve funds. South Carolina’s polices for rainy day fund disbursement and replenishment follow best practices identified in the recent Volcker Alliance working paper, Rainy Day Fund Strategies: A Call to Action. But the state missed an A by failing to connect rainy day fund deposits to historical revenue volatility. Twenty-eight other states also lack such a tie.
To emphasize the need for clear and comprehensible budgets to inform citizens, promote responsible policymaking, and improve fiscal stability, the Volcker Alliance in 2016 began a study of budgetary and financial reporting practices of all fifty states. The Volcker Alliance’s mission is to improve the effectiveness of the administration of government at all levels. Making state budgeting more transparent and accountable is an important part of that goal.
The report cards found here contain grades of the state's budgetary practices during the fiscal years of 2017 through 2019. Each state received marks in five critical categories, based on their adherence to best practices in several key budgeting indicators. The five categories covered methods used to achieve budgetary balance as well as how budgets and other financial information are disclosed to the public.
States received grades of A to D-minus (there are no “failed states”) for their procedures in estimating revenues and expenditures; their use of one-time actions to balance budgets; how they oversee and use rainy day funds and other fiscal reserves; the adequacy of their funding of public worker retirement and other postemployment benefits; and the quality of transparency of budget and related financial information. The grades are based on research conducted by public finance and budgeting professors and students at eight US schools of public administration or policy. The universities’ research efforts were augmented by Volcker Alliance staff, data consultants at Municipal Market Analytics, and special project consultants Katherine Barrett and Richard Greene.
State Budget Sources
State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses is a resource published by the Volcker Alliance designed to help public officials, policy advocates, journalists, academics, and concerned citizens fully understand the critical fiscal decisions that governors and legislators must make. The guide includes the links below to budgets for this state as well as legislative analyses of budget bills and treasurers’ or comptrollers’ monthly state cash-flow statements; capital spending plans; reports on public-worker pension funding and returns; and reports by local and national fiscal research organizations, bond rating firms, and associations of state fiscal and finance officials.