A study released by Clemson University indicates that South Carolina’s budget difficulties could be avoidable if the state Legislature did a better job in its adoption of new tax laws.

The report, “Fiscal Sustainability in South Carolina: Trends and Issues,” also finds that the state could face a $2 billion shortfall in revenues in five years if it does not deal with tax and expenditure problems.

“If the state chooses to bring the level of public services per capita back to 2008 levels, then by 2013 projected spending could exceed projected revenue by as much as $2 billion,” according to the report.

But that shortfall is a worst-case scenario and could actually result in a surplus, said Ellen Saltzman, an economist and research assistant on the paper.

“We’re not saying there’s going to be a $2 billion shortfall,” Saltzman said. “It (revenues) could be moving between … what we’d like to spend and what the current revenue structure can bring in.”

Past action has affected revenues, including making the school systems more dependent on sales taxes, she said.

The South Carolina Board of Economic Advisors recently reported that with the change through Act 388, the sales tax revenues for schools fell $14.5 million short of projections last fiscal year. And this current fiscal year, it is estimated there will be a $36.2 million deficit.

For the next fiscal year, a $70 million shortage of sales tax revenue for schools is projected, according to the report and Saltzman.

“Sales tax is great if the economy is strong and growing, but is a very volatile source of income … and has made our schools dependent on it,” Saltzman said.

South Carolina this year faces a more than $500 million tax overall shortfall, forcing statewide cuts in agencies, including colleges such as Clemson and the University of South Carolina. Clemson adopted a mandatory five-day furlough for its 4,000 employees to save money. Officials at USC have said they soon will announce their plans to deal with the cuts.

If state is to get out of the cycle of budget shortages, the state should adopt policies that improve its revenue system, according to the report.

“The state remains highly vulnerable to the effects of economic downturns because of legislative spending commitments created in the last few years,” the report indicated.

Saltzman said some recommendations for policymakers are:

— resist additional earmarking of revenues;

— diversify General Fund revenue sources; and

— build up the General Fund to be able to weather shortfalls.

The study is being sent to legislators and the governor. Clemson economist Holley Ulbrich is the study’s co-author.