State revenues remain healthy
The S.C. Board of Economic Advisors (BEA) met this week and continued their bullish assessment of South Carolina’s economy and hence revenues from taxes and fees.
Fiscal Year 2023, which ran through June 30, ended a little better than the BEA expected. Because of challenges from factors such as inflation and recession fears, the BEA expected a 4.9 percent drop in revenue from the previous year. However, the decrease ended up being only 4.1 percent. While a slight decrease, total revenues still amounted to just over $13 billion.
The BEA expects the economy to cool in FY 2024, forecasting for FY 2024 a 4.9 percent drop in revenues from FY 2023. But looking down the road to FY 2025, it anticipates revenue growth of 3.1 percent over this fiscal year.
In making its predictions, the BEA noted the following questions, the answers to which will have a big impact on the state’s bottom line:
- Will wage growth slow and by how much?
- Will the US enter a recession and what level of impact will we see?
- How long will the Federal Reserve continue to raise interest rates?
- How will global economic issues affect SC’s economy?
- Does consumer spending change due to inflation