On Tuesday, the South Carolina Budget and Control Board cut $238.2 million to balance the state budget, taking funds from public schools, state colleges and local governments. The decision was not easy to make, said state Comptroller Richard Eckstrom, the board's chairman.
"Agencies had already cut the fat, but we're cutting into the bone right now," he said. "With a decline in revenues and an unemployment rate above 12 percent, we had to deal with abnormal conditions."
Declining revenue from sales taxes and individual income taxes, which can be attributed to a lack of consumer confidence, the economy and high unemployment, led to the across-the-board cuts, Mr. Eckstrom said. Income tax collection is down $100 million compared with the same time last year. Sales tax collection is down more than $166 million, Mr. Eckstrom said.
County Administrator Clay Killian said the county was prepared for the dip in revenue, which could result in about a 2 percent cut to the $6.9 million the county gets from the state. A hiring freeze has helped the county save more than $400,000. The Capital Project Sales and Use tax has allowed the county to pay for equipment improvements and other projects. However, next year's budget could see some effects from the recent cuts.
"We're going to find a way to operate within our means even if we have to levy tax to make up for a deficit," he said. "That's not the plan; it's not certain that we won't raise property tax."
Aiken County school officials planned for the latest round of budget cuts months ago, said district Comptroller Tray Traxler.
In approving the 2009-10 budget last summer, the school board placed $4.8 million in contingency and used federal stimulus money to balance the budget, he said. That contingency money will soften the latest cut, he said.
As Mr. Traxler prepares for the 2010-11 budget season, he said he's not sure what type of cuts the district will face next year.
"We just have no clue," he said. "Hopefully the economy will start turning around."
University of South Carolina Aiken Chancellor Tom Hallman said he also foresees effects from the cuts in next year's budget. More than $400,000 will be cut from the university's budget, but he said it also has contingency funds to cover the anticipated cuts.
"We have some positions held right now. We'll continue to hold them," he said. "I don't anticipate layoffs or furloughs, but there will be some impact."
Mr. Eckstrom said some agencies will have to consider furloughs, and many will not make any changes until next year.
The holiday season could result in an uptick in sales tax revenue.
"We're holding our breath. We're anxious to see what December retail will look like," he said.
Staff writer Julia Sellers contributed to this article.
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