South Carolina ranks 40th for its fiscal health, report shows
(The Center Square) — A taxpayer advocacy group gave South Carolina a “D” financial grade, ranking the state 40th in the country for its fiscal health.
According to the non-profit Truth in Accounting’s “Financial State of the States 2023” report, South Carolina had $29.9 billion to pay $52.9 billion worth of bills — a $23 billion shortfall. As a result, the group said the state would need $14,000 from every taxpayer to pay its outstanding bills, which include bonds and unfunded retiree health care benefits.
South Carolina, like other states, saw its economic condition improve on the heels of federal COVID relief money and increased tax collections. However, the group noted that “unfunded retirement obligations,” such as pensions, “continue to plague South Carolina’s ability to pay its bills.”
“Over the last two years, the value of South Carolina’s pension investments has been subject to the volatility of the markets,” according to the report. “In 2021 financial markets improved and the state’s pension investments reported significant gains.
“Unfortunately, market conditions turned negative during fiscal year 2022, resulting in significant unrealized investment losses which in turn caused the amount of unfunded promised pension benefits to increase,” the report added. “This volatility highlights the risk to pension systems and taxpayers of fixed benefits that are partially funded by earnings from erratic markets.”
A spokesman for Gov. Henry McMaster, a Republican, did not immediately respond to a request for comment. However, on Monday, South Carolina officials announced many businesses will see a decrease in their taxes in 2024, saying the state’s Unemployment Insurance Trust Fund is “fully solvent.”
“There is no better time to be in business in South Carolina,” McMaster said in a release announcing the UI business tax decrease. “The state’s leadership has worked hard to make strong financial decisions that maintain a healthy unemployment insurance trust fund which will benefit employers in the coming year. With a growing economy, a stable trust fund balance, and lower business tax, South Carolina proves once again that it is the ideal destination for business development and success.”
