July 11, 2017

#19 | Ranking the States by Fiscal Condition: South Carolina

Summary

On the basis of its fiscal solvency in five separate categories, South Carolina is ranked 19th among the US states for its fiscal health. On a short-run basis, South Carolina has between 2.26 and 3.32 times the cash needed to cover short-term liabilities. Revenues exceed expenses by 5 percent, and net position improved by $228 per capita in FY 2015. On a long-run basis, net assets are 13 percent of total assets. Long-term liabilities are 28 percent of total assets, or $1,509 per capita, which is lower than the average across the states of $4,272 per capita. Total primary government debt is $3.11 billion, or $635 per capita. Unfunded pension obligations, on a guaranteed-to-be-paid basis, are $70.35 billion, or 38 percent of state personal income. OPEB is 5 percent of state personal income.

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Key Terms

  • Cash solvency measures whether a state has enough cash to cover its short-term bills, which include accounts payable, vouchers, warrants, and short-term debt. (South Carolina ranks 20th.)
  • Budget solvency measures whether a state can cover its fiscal year spending using current revenues. Did it run a shortfall during the year? (South Carolina ranks 22nd.)
  • Long-run solvency measures whether a state has a hedge against large long-term liabilities. Are enough assets available to cushion the state from potential shocks or long-term fiscal risks? (South Carolina ranks 12th.)
  • Service-level solvency measures how high taxes, revenues, and spending are when compared to state personal income. Do states have enough “fiscal slack”? If spending commitments demand more revenues, are states in a good position to increase taxes without harming the economy? Is spending high or low relative to the tax base? (South Carolina ranks 27th.)
  • Trust fund solvency measures how much debt a state has. How large are unfunded pension liabilities and OPEB liabilities compared to the state personal income? (South Carolina ranks 35th.)

For a complete explanation of the methodology used to calculate South Carolina's fiscal health rankings, download the full paper and the dataset at mercatus.org/statefiscalrankings

To read all our work on South Carolina, go to mercatus.org/states/southcarolina.