COLUMBIA, S.C. -- The chairman of the state's Board of Economic Advisors said Monday that South Carolina's economy is doing OK, and the downturn could be short-lived.

John Rainey said thousands fewer workers than expected are filing for unemployment insurance. Since the beginning of the year, the number of new workers filing weekly has declined by more than half, from about 12,300 to 5,300. Rainey says that indicates the state's economy is not in a recession.

"This is contrary to what you'd expect to see," Rainey said at Monday's board meeting.

The board met as House and Senate members continued to work out differences in their $7 billion budget plan for 2008-09.

Last month, the economists said South Carolina would collect $90 million less than initially thought, prompting the Senate to cut money from the budget. The board made no changes Monday but decided to meet again in two weeks.

State coffers contain about $50 million less than projected last month, said the state's chief economist, Bill Gillespie. But he says early filing for tax returns account for most of that. He says taxpayers have likely filed earlier than in past years in order to get their federal economic stimulus check.

It's a timing issue, Gillespie said, and the state should get at least $30 million of that back.

Economic forecasters also said a slight increase from last year in corporate income tax collections indicates no large-scale layoffs.

"Corporations are not showing big disaster," Gillespie said. "These numbers do not say we're falling in the hole."

Rainey said the declining value of the dollar is actually helping South Carolina manufacturers.

Sales tax collections are down $89.9 million from last year. But the elimination of the sales tax on groceries, which the Legislature approved last year, account for $88 million of that drop, economists said.

On Monday afternoon, House and Senate members slowly made their way through their budget plans, postponing debate on contentious areas.

The conference committee will resume meeting Tuesday morning.

Last month, the Senate cut $180 million from the budget, and the House approved most of those cuts. But there are big differences in how the state would pay for public school programs. The House included plans for tourism grants and projects related to college research, but those were cut by the Senate.