August 20, 1999


FOR RELEASE: IMMEDIATELY


Comptroller General James A. Lander announced today that the state’s Budgetary General Fund ended the 1998-99 fiscal year with the largest surplus in the state’s history. Of the budgetary surplus, $88 million is an unobligated amount that the General Assembly will determine how to spend when it convenes in January. This surplus would allow the General Assembly to give $12 million to $20 million to school, local government, and state agency employers to help them fund the 10% increase in health insurance contributions that they must cough up beginning January 1, 2000. Ever since the State Budget and Control Board’s June 29 decision to levy this insurance rate hike, some affected government employers have protested that they don’t know how they can squeeze the money out of their already tight budgets.  The General Assembly also could use about $4 million of the $88 million to fully fund a one-time match of state employees’ 401(k) deferred compensation contributions. Originally, the General Assembly planned to match up to $300 per employee, but it ended up funding less than half of the program’s estimated $7 million cost.

Comptroller General Lander expressed concern about a sweeping new "financial reporting model" that the Governmental Accounting Standards Board is requiring all state and local governments in the United States to implement. He would like to see the General Assembly allocate about $3 million of the $88 million to help pay for costs associated with an update of the state’s current automated financial reporting system. These are costs that he says are unavoidable if South Carolina is to have a chance of meeting the deadline of June 30, 2002, that has been imposed by the national Governmental Accounting Standards Board. If South Carolina fails to implement the model as soon as most other states, it could suffer a loss of its AAA credit rating. "Spending $3 million now could save the state tens of millions in interest costs on down the road," Lander said.

The $88 million unobligated surplus is part of a $410 million total budgetary surplus for the just-ended fiscal year. Before it left town in June, the General Assembly disposed of $322 million that the Board of Economic Advisors had anticipated would be available, primarily as a result of the state’s booming economy. Although some state officials may have believed that even more than $322 million might be available at year-end, they didn’t know just how much more until the Comptroller General’s Office closed the state’s books.

In conclusion, Lander said, "I’m confident that the General Assembly will put this $88 million bonus to good use."

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For additional information, contact the Central State Finance Division of the South Carolina Comptroller General’s Office at (803) 734-2128.