South Carolina

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.

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 2020 Volcker Alliance report, Truth and Integrity in State Budgeting: The Balancing Act, 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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