Board of Economic Advisers Chairman John Rainey, in looking over his less-than-shiny economic forecasts for the state, says South Carolina is missing out on some revenue that it could have in these dire times.
As a special panel continues to review the state’s tax structure, Rainey says now is the time to reconsider some exemptions. For one, the grocery tax exemption.
“As bad as things are it’s interesting that there have been increases in several components of consumer spending,” says Rainey. “And I’ve harped on this more than people probably want to hear. But one of those components was food. But that does South Carolina absolutely no good because we took the tax off of groceries and that is costing this state $374 million in revenues. When you see nationally that states are collecting more from food tax because people are spending more, you can forget South Carolina because we aren’t–because we put that additional exemption on our books.”
Rainey appears to have a rather cynical attitude about politics in South Carolina, which is understandable given the nature of his job. He says there’s fat chance that the food tax will be restored.
“That and world peace breaking out probably have an equal chance,” he joked. “They’re just not going to put that kind of tax back on the consumer once it has been taken off. I can’t frankly remember a tax ever being restored. I’m sure one has been. I just can’t remember what it was.”
The Board of Economic Advisers decided last week not to change the current revenue estimate. Current revenue projections for the state for the fiscal year are $5.619 billion. The state’s Budget and Control Board recently implement funding cuts to state agencies to reflect the two-percent drop in revenue the B.E.A. projected last month.