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.
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 2015 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.