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The SC economy is not slowing down; State now has an additional $ 1 billion

COLUMBIA   – The amount of money in South Carolina’s state bank accounts continues to grow thanks to a r -id recovery from the economic shock of the COVID-19 pandemic and people spending much faster than experts predicted.

The latest estimate, released on Wednesday, says that South Carolina lawmakers can spend nearly $ 1 billion more this fiscal year, according to the state economic advisory committee.

That brings the money that the General Assembly has control over to nearly $ 11 billion, not counting the roughly $ 3 billion in federal COVID-19 aid that comes to South Carolina.

It also doesn’t count a $ 1 billion surplus after the state clears books for the fiscal year ended June 30. Predictions that economic growth would slow because supply chain problems, consumers slowed their spending, or dwindling federal subsidies came true.

The 13.2% growth in the 2020-21 budget is the largest in at least 40 years, the board said.

Sales tax revenue in South Carolina continues to grow, growing by $ 500 million to $ 3.8 billion in the past fiscal year. Corporate tax revenue has also risen sharply as retailers benefit from all of the additional expenses.

The country’s economic experts still believe that the r -id increase in income cannot continue. They predict the budget for the next fiscal year beginning July 1 will also be around $ 10.9 billion.

But the board admitted it was wrong, saying its prediction was more volatile than usual.

The experts also warned that if US lawmakers fail to raise the national debt ceiling in December, revenues could coll -se, leading to an unprecedented default that could decimate the economy.

All of the extra money likely means a lot of debate in the South Carolina General Assembly about raising wages for government officials and helping rural school districts that don’t have a large local tax base. There is also likely to be a lot of discussion about spending on infrastructure elements, such as crumbling, overcrowded streets, decades-old water and sewer systems, or old buildings at government colleges and universities.

Governor Henry McMaster spent the fall making several suggestions on how to spend federal pandemic aid money to expedite the expansion of Interstate 26 to three lanes in each direction from Charleston to Columbia; Start building part of Interstate 73 in Pee Dee; or repair or build local sewage and water systems.

The additional revenue could also reinvigorate the tax cut debate or reform of South Carolina’s tax system, which was put on hold at the start of the COVID-19 pandemic in early 2020.

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