(Columbia-AP) Aug. 15, 2003 - The Board of Economic
Advisors on Friday morning reduced its
estimate of state revenue for the current year by $108
million. The board's action comes at a time of sagging
state tax collections.
Chairman John Rainey says the two percent reduction
reflects economic problems, such as the state's 7%
percent unemployment rate.
Two years of state budget deficits have brought an
abundance of criticism from Governor Mark Sanford's
office and Comptroller General Richard Eckstrom. They
are both blaming former Governor Jim Hodges.
Eckstrom and Sanford's office said Thursday that the
Democrat swept the state's deficit problems "under the
rug." Now, a $22 million shortfall remains after the
state emptied $40 million in rainy day accounts by the
end of the fiscal year that ended June 30th on top of
$155 million deficit from last year.
The state is using money for this year's $5.1 billion
budget to make up for last year's shortfall, just as it
did the year before.
Hodges says the deficit has nothing to do with poor
stewardship and has everything to do with a weak
economy. He says all but two states around the nation
are in similar financial straits. The former governor
adds Republicans control the Statehouse, governor's
office and the state Budget and Control Board and
haven't dealt with the problem, either.
Sanford and Eckstrom, both Republicans, are calling
for immediate budget cuts when the state Budget and
Control Board meets next week. Eckstrom said the state
has to balance its budget immediately, even if that
means taking money from state agencies. The state
constitution requires a balanced budget.
Eckstrom also wrote Board of Economic Advisers
Chairman John Rainey earlier this week, asking for an
immediate meeting of the state revenue forecasting
group. Eckstrom says given the lackluster economy, that
board needs to say whether its revenue forecast for the
current budget year will meet spending demands.
The Budget and Control Board has a capital reserve
fund of more than $100 million it could use before it
orders cuts by state agencies.
updated 10:47am by Chris
Rees
