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Municipal Association of South Carolina

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Statutory Funding of the Local Government Fund

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Challenge

In the current economic environment, cities and towns have prioritized projects and spending. However, with limited revenue options and increased service demands, cities and towns must increasingly rely on the Local Government Fund as a stable revenue source to meet local needs.

Solution

Ensure all revenue collected by the state on behalf of local governments is returned to cities and towns through a statutorily funded Local Government Fund. Cities and towns depend on the Local Government Fund as a stable revenue source to provide the services, infrastructure and programs that spur economic growth in local economies.

Talking Points

LGF naturally adjusts in down economies because it is a percentage of state General Fund revenues.
Cities and counties have taken a 20 percent cut annually for the past three years on top of the natural decrease.
State General Fund revenues decreased 21 percent from FY 09 to FY 12, while the LGF was cut by 40 percent.