Staff Report
Published Aug. 17, 2009

South Carolina closed the books Friday on the 2009 fiscal year at about $98 million in the red, Comptroller General Richard Eckstrom’s office said.

The general fund shortfall, which carries forward to the current fiscal year that began July 1, was the deficit remaining after two state reserve funds were exhausted to pay down what originally was a $339 million hole.

The state’s capital reserve fund, which stood at $133.2 million, was emptied, along with the full $108.1 million that constituted the state’s “rainy day” fund.

At the 2009 fiscal year’s end, total revenue collections were off by $1.2 billion from original estimates that state lawmakers used to write the budget. Across-the-board cuts, targeted agency cuts and other measures throughout the year helped narrow the gap as state economists revised revenue projections to match the shrinking economy.

Those cuts totaled $947.7 million. But, in the end, revenue estimates still were too optimistic and agencies overspent, the Comptroller General’s Office said.

Plugging a year-end deficit with state reserve funds isn’t new. In fiscal 2008, for example, the state also used reserve funds, to address a $250 million deficit.

But because of the 2009 shortfall and the $98 million negative carryover to fiscal 2010, the state starts off behind financially in what is expected to be another tough budget year, said R.J. Shealy, spokesman for the Comptroller General’s Office.