South Carolina

State Budget Practice Report Cards and Budget Resource Guide

South Carolina’s top A averages in budget forecasting and budget maneuvers for fiscal 2015 through 2019 were offset by its D, the second-lowest mark possible, in legacy costs. The poor showing resulted from unfunded liabilities weighing it down in the category, which includes public worker pensions and other postemployment benefits (OPEB), primarily health care.

Although the state provided annual funding in line with actuarial recommendations for public worker pensions for each year of the study period, South Carolina’s 55 percent pension funding ratio was among the ten lowest in the US in 2019, at 16 percentage points below the total for all states. The state’s unfunded net OPEB liability for the year was $17.1 billion. Like twenty-three other states, it did not follow actuarial recommendations for its annual contributions to OPEB in any of the years studied.

In the budget maneuvers category, even the pressure of legacy costs did not prompt the state to employ one-time measures to achieve balance. It also followed best practices in budget forecasting, using a consensus method of revenue estimating driven by its Board of Economic Advisors. Publicly available information on assumptions underly revenue growth projections, and a three-year general fund financial outlook includes revenues and expenditures.

South Carolina’s B average in reserve funds reflects overall solid policies for General Reserve Fund disbursements and replenishments.

Download Printable State Report Card

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 presented here are taken from the 2021 Volcker Alliance report, Truth and Integrity in State Budgeting: Preparing for the Storm, which proposes a set of best practices for policymakers. For those wishing to gain greater insight into state fiscal issues, the accompanying budget resource guide is derived from the Alliance publication State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses (2016). 

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