Report: Grim News For South Carolina Economy

South Carolina's Board of Economic Advisors got an update on how bad the state's economy really is Friday.

By: Robert Kittle | News Channel 7
Published: September 26, 2008

COLUMBIA - South Carolina’s Board of Economic Advisors heard some pretty grim news Friday afternoon about the state’s economy.

While they had originally predicted three percent growth for the year, so far the state’s tax collections have dropped 5.5 percent. Board chairman John Rainey told reporters by phone after the meeting, “The numbers have fallen off a cliff.”

The economic downturn means more state budget cuts will have to be made in addition to the three percent across-the-board cut already made recently. When there’s negative growth of at least 4 percent, state lawmakers can come back to Columbia to deal with it, but the board did not trigger that call until the final numbers for this quarter come in next month

A slowing economy marked by rising gas prices and with unemployment at a 15-year high also are considered among the main problems that have contributed to the news.

One of the main concerns about additional budget cuts is the effect that could have on our schools.

Jim Foster of the South Carolina Department of Educations says that if there are more budget cuts, the main goal for school districts will be to protect teachers' jobs. Foster says that possible cuts will vary by district. "Typically it's programs like summer school, for example, is one of the first things that can go. They try to find a way to remediate children after the school day. There's obviously travel, things you can do. When we had our bad budget cuts back in 2001 through 2003, districts turned their thermostats down and told kids to wear jackets to school in the winter time," he says.

A decision by the board to reduce its revenue projections for the state could force the legislature to return to Columbia and deal with budget problems. The cost to bring lawmakers back to Columbia would be about $33,000 for the first day and $20,000 for any additional day. Mileage and per diem would be included in the first day expenses and per diem would only be included in any days afterwards.

House Ways and Means Committee chairman Dan Cooper, R-Piedmont, and Senate Finance Committee chairman Hugh Leatherman, R-Florence, sent Gov. Mark Sanford a letter Friday afternoon to tell him they will begin meeting with their staffs to come up with plans for cutting the state budget.