'There's a budget crisis': Lawmakers say COVID-19 completely changes SC's spending plan

COLUMBIA, S.C. (WPDE) — In early March, the South Carolina House of Representatives approved a $10 billion dollar budget that would potentially allocate millions of dollars for teacher salaries, roads, safety at state prisons and tax relief and rebates.

They had sent it to the State Senate for discussion before the coronavirus outbreak hit South Carolina. Now, all state lawmakers are at home until further notice.

"We started session back in January with all the things, all the projects we were working on and plans we had, and here we are back at home. No, it's not something anybody expected,"State Senator Greg Hembree (R-District 28) said.

State lawmakers say that a detailed spending plan will likely look a lot different when it's finally signed into law, thanks to COVID-19.

The coronavirus' grip on the state's economy has led to layoffs and business closures.

"It''s like a category five hurricane hitting you repeatedly. Just looping out to sea and coming back and hitting you because you're being robbed of all those tourists. Granted, we're not seeing devastation of infrastructure, but we're seeing devastation of the financial infrastructure that holds us together,"State Representative Tim McGinnis (R-District 56) said.

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Many South Carolinians are now rethinking how they spend their money, and state lawmakers are doing the same with the state budget.

"We had teacher raises tied into, funding of essential services tied into that, money that was going to go into different tax rebates, things like that. We''re going to have to rethink all of that," McGinnis said.

Instead of improvements and expansions, lawmakers say the budget will now have to focus on maintaining the services we have.

"I think we'll be able to maintain government services at the current state, I'm not worried about that. But I don't know that we'll be increasing some things that we were intending to increase," Hembree said.

That budget was created with the expectation of having a nearly $2 billion budget surplus, based on economic projections from the state's Office of Revenue and Fiscal Affairs. Now, lawmakers aren't so sure all that money will be there, and if it is, they say it would likely need to go towards recovering from this outbreak.

"This is kind of like a magic wand that will erase a lot of work that we did. Particularly with the budget. That budget is based on what we have, what we've taken in, and projections of what we're going to take in. Money that we thought would be recurring may not now be recurring. There's a budget crisis," McGinnis said.

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Frank Rainwater, the director of the state's Office of Revenue and Fiscal Affairs, said a board of economic advisors will meet virtually on April 9 to discuss how they will need to adjust those economic forecasts so the General Assembly can amend its budget accordingly.

"The forecast was built on continued growth. We were expecting growth through the rest of this fiscal and growth into the next fiscal year. Obviously we've hit a stumbling block, " he said. "It's difficult to predict. Our challenge is, regardless of whats going on, we have to give the General Assembly our best guess of how revenues are going to finish this fiscal year and what the expectations are for next fiscal year," Rainwater said.

Rainwater said, luckily, economists had initially predicted an economic stagnation next year, though not one of this scope or magnitude.

"Fortunately, in our forecast for the next fiscal year, we had anticipated a slowdown in the economy, anyway. At the time, we were concerned about things like tariffs trade wars, Brexit, some of those international concerns. Those went away and now we have a different phenomenon affecting us. Now, obviously that's a little bit stronger, a little bit more dynamic. But to an extent, we'd already mitigated some of this downfall because of lower growth expected next year. We're able to cushion that," Rainwater said.

But at this point, he said his office doesn't have a whole lot of data to provide a clear picture of the state's economic future.

"The revenues that we are going to receive for the month of March get reported to us in April. Even so, they're not really on a real-time basis," Rainwater said.

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What makes predicting the future even more challenging, is that leaders don't know when this outbreak is going to end.

"That's the key factor: when we're going to be able to return to normal. Until there's a clear indication, it's hard to judge what the next year's forecast is," he said.

He said his office likely won't have enough data to fully amend the economic projections by April 9, but he hopes they'll have a better idea in time for their next meeting in May.

"It may be necessary for the board to take some type of preliminary action and then reconsider the forecast again in May. Hopefully, when the board meets on May 14th, we will have a better understanding of the depth, the magnitude, and hopefully the containment of COVID-19," he said.

As for the House's current budget, lawmakers cannot meet to discuss it at the moment and they're not sure when or if they'll be able to before the legislative session ends in May.

Hembree said they'll likely adopt a continuing resolution to keep the state's key operations going amid the crisis, even without a new budget. He said lawmakers will then likely have to debate and amend the new budget in the legislative off-season.