August 20, 1998
FOR RELEASE: IMMEDIATELY
The Completed Fiscal Year--Comptroller's Overview
The State of South Carolina's Budgetary General Fund has ended its 1997-98 year with a sizable cumulative budgetary surplus of $254.9 million. During the fiscal year, $7.8 million more came in (as revenues) than went out (as expenditures and transfers).
The General Assembly has directed that $173.1 million of the $254.9 million budgetary surplus be applied to the following items during the 1998-99 fiscal year:
The remaining $81.8 million surplus is uncommitted. The General Assembly will develop a supplemental appropriations bill when it convenes in January.
In a departure from previous years, the General Assembly delayed the distribution to agencies of supplemental appropriations until September 1, 1998. I commend the General Assembly and the Governor for this change, which I have advocated for several years. As a result of the amended wording, the General Fund's balance sheet at June 30, 1998, will report $86.2 million more in "unreserved fund balance" than it otherwise would be allowed to report under Generally Accepted Accounting Principles (GAAP). Standard & Poor's, one of the State's bond rating agencies, has criticized the State in the past for having a negative unreserved fund balance in its GAAP-basis General Fund. This year's policy change will go far toward improving the structure of the statewide Balance Sheet and alleviating the concerns of the bond rating agencies.
Again this year, money will be returned to homeowners under the property tax relief and homestead exemption programs. During 1997-98, $277 million was refunded to homeowners under these programs; my office anticipates that approximately $293 million will be refunded to homeowners under these programs during 1998-99.
The Completed Fiscal Year--Other Key Financial Statistics
The General Fund's revenue estimate at the start of 1997-98 was $4.676 billion. In November 1997, the Board of Economic Advisors approved a net upward revision of $64 million. Accordingly, the revenue estimate at June 30, 1998, was $4.740 billion. The actual revenues of $4.846 billion were $106 million above the revised estimate.
Original appropriations after the Governor's vetoes for the General Fund in 1997-98 were $4.674 billion, and agencies were allowed to bring forward another $295 million into 1997-98 from 1996-97. Net increases in appropriations recorded during 1997-98 totaled $8 million. At year-end, therefore, total appropriations were $4.977 billion. Of this $4.977 billion, the State spent $4.754 billion, set aside $87 million of Capital Reserve monies for expenditure in 1998-99, and carried forward $131 million from special carry-forward provisos and a provision that allows agencies to carry forward up to 10% of their budget. The remaining balance of $5 million represents net lapses of unspent appropriations.
The General Reserve was fully funded at June 30, 1997, with a balance of $130.4 million. The full funding requirement as of June 30, 1998, was $137.6 million. Accordingly, the General Assembly has directed that 1997-98 surplus monies be used to increase the Reserve to the full funding amount during 1998-99.
The Capital Reserve had a balance of $84 million at June 30, 1997. During 1997-98, all $84 million was allocated to various projects. Early in 1997-98, $87 million was added to the Reserve in accordance with the 1997-98 Appropriation Act. In June 1998, the General Assembly enacted a Joint Resolution to appropriate the $87 million for projects in 1998-99.
About This Report
This report represents the best financial data available as of August 20, 1998, regarding the State's financial position and operations for the fiscal year ended June 30, 1998. Information in this report is limited to the portion of the State's operations presented by the Budgetary General Fund. Furthermore, the report was prepared using the budgetary basis of accounting. The State's budgetary basis is the cash basis with certain exceptions. The presentation of this report is not intended to comply with Generally Accepted Accounting Principles (GAAP).
After completion of the statewide audit, my office will issue a Comprehensive Annual Financial Report for the State of South Carolina for the fiscal year ended June 30, 1998. That report will include audited GAAP-basis and budgetary-basis data for all of the State's funds and account groups.