Some blame SC's budget problems on tax cuts

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Some blame SC's budget problems on tax cuts

Story Published: Dec 3, 2008 at 9:55 AM EDT

Story Updated: Dec 3, 2008 at 9:55 AM EDT

COLUMBIA, S.C. (AP)- State economists say tax cuts, rather than the economic downturn, are to blame for much of South Carolina's budget problems this year.

Officials have cut $621 million from a $7 billion dollar state budget since July because of falling revenue.

Chief state economist William Gillespie told The State newspaper the elimination of sales taxes on groceries makes up almost the entire decline in sales tax revenue. Sales taxes are $72 million behind projections.

The Board of Economic Advisors earlier this month lowered its revenue estimates for the fourth time since May.

The elimination of the sales tax on groceries costs an estimated $375 million.

The situation may get worse. University of South Carolina economist Doug Woodward says fewer people will be paying income taxes as unemployment increases.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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