State Economists Issue Updated Revenue Forecast

Last week, the South Carolina Board of Economic Advisors (BEA) issued revised General Fund revenue forecasts for FY2023-24 and FY2024-25. Thanks to continued economic growth and prosperity throughout South Carolina, the state’s General Fund revenues continue to exceed expectations prompting the BEA to raise its estimates for both fiscal years.

For FY2023-24, the BEA increased its estimate by $426.8 million to $12.89 billion. The new estimate for this fiscal year will leave state budget writers with a one-time surplus of $448.1 million. Combined with the prior year’s surplus and the FY2023-24 Capital Reserve Fund, lawmakers will have $896.1 million in one-time funds available to appropriate for non-recurring purposes.

For FY2024-25, the BEA increased its forecast to $13.21 billion meaning that budget writers will likely have $673.1 million in new recurring revenues to appropriate during this year’s budget process. The BEA notes that the growth projected in the revised FY2024-25 revenue forecast “…is sufficient to trigger the next individual income tax rate reduction from 6.4 to 6.3 percent for tax year 2024.”

Key contributors to the continued stronger than expected revenue collections include wage growth, sales tax collections, and corporate income tax collections. More information on the revised forecast can be found here.