Across the country local government revenues have decreased while operating costs such as fuel, materials, equipment, and health insurance costs have significantly increased. In addition to reduced revenues, interest earnings for city and county government investments are low. These factors combined have created a difficult financial arena in which local governments must operate. While economists are reporting signs of economic recovery, many city and county budgets are just now feeling the full brunt of the economic downturn that began in 2008. On a daily basis, news media nationwide report local governments addressing budget deficits by cutting services, eliminating positions, or furloughing employees.

To study the effect of the recession on South Carolina’s local governments, the University of South Carolina’s Institute for Public Service and Policy Research (IPSPR) conducted a survey to determine the true impact on local government revenues and the fiscal strategies municipalities and counties have used to reduce expenditures. The purpose of this article is to summarize the survey results and to detail how local governments in South Carolina reacted to the economic downturn.