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ISSUE 10.26
Jul. 01, 2011

RECENT ISSUES:
12/04 | 11/27 | 11/20 | 11/13

Index

News :
Finding a balance
Radar Screen :
Stormy weather
Palmetto Politics :
Ladies and Gentlemen: The Republicrats!
Commentary :
Budget board may not be broken
Spotlight :
Maybank Industries
Feedback :
Need to vent a little?
Scorecard :
Colbert to Haley to Ard
Stegelin :
Broken pen
Megaphone :
Sour grapes or grapes of wrath?
Encyclopedia :
Clemson's Tillman Hall
In our other publications :
Check out Charleston Currents

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EDITOR'S NOTE

Have a happy, safe Fourth

Next week, we'll offer a pared-down issue to allow the Statehouse Report staff to get a little R & R after a long session.  In the meantime, have a happy and safe Fourth of July holiday!

NUMBER OF THE WEEK

$48,400.00

That’s how much Lt. Gov. Ken Ard (R-S.C.) will have to pay in fines for campaign financing mistakes. That’s nearly $2,000 more than he earns in the position annually. He was found guilty of 107 ethics violations, the most ever in state history.   Ard also agreed to write a $12,121.25 reimbursement check to his campaign and wrote a $12,500 check to the state to pay for its investigation.  More.  Today, S.C. Democratic Party Chair Dick Harpootlian called on Ard to resign. 

MEGAPHONE

Sour grapes or grapes of wrath?

“My question was, what authority does [Gov. Nikki Haley] have to do this? She has none.”

-- Departing SLED director Reggie Lloyd, firing off some final remarks this week at Haley, who sent him a directive to clear all hires, fires, and raises with her office earlier this year, even though his was not a cabinet agency. Lloyd was to leave office today. More.

ENCYCLOPEDIA

Clemson's Tillman Hall

Other than the famous Tiger Paw, Tillman Hall is the most recognizable symbol associated with Clemson University. Its brick clock tower rises above the tree line, making it the most prominent of the original campus buildings.

Originally known as the Main Building, this three-story brick structure was intended to be the centerpiece of the college located at the top of a hill near the home of John C. Calhoun, whose plantation was given to the state by his son-in-law, Thomas G. Clemson.

The building was designed by the architects Alexander C. Bruce and Thomas H. Morgan of Atlanta, and construction began in late 1890 and was complete when the school opened in 1893. On May 22, 1894, a fire in a third-floor laboratory spread to the rest of the building, destroying everything but its brick walls. Bruce and Morgan returned to oversee the reconstruction, which began immediately and was completed in 1895.

Connected to the Main Building was Memorial Hall, an all-purpose assembly space that served as chapel, meeting hall, and entertainment venue. It was also the setting for early graduation exercises.

The building officially became known as Tillman Hall on the fiftieth anniversary of Clemson's first graduating class in 1946, when it was renamed in memory of Benjamin Ryan Tillman, the former South Carolina governor, U.S. senator, and ardent voice for the establishment of the college. In 1963 Tillman Hall was the site where the architecture student Harvey Gantt peacefully enrolled in school, the first African American to be admitted to Clemson. Since the late 1960s Tillman Hall has been the home of the university's School of Education, and its auditorium hosts lectures, concerts, and other events.

-- Excerpted from the entry by Bradley S. Sauls. To read more about this or 2,000 other entries about South Carolina, check out The South Carolina Encyclopedia by USC Press. (Information used by permission.)

IN OUR OTHER PUBLICATIONS

Check out Charleston Currents

If you want to read some good news and views involving Charleston, take a look at CharlestonCurrents.com, our sister publication.  In the most recent issue, you'll learn business interests why cruise ships are important in Charleston.  And editor Marsha Guerard seeks help in naming a new dog.  Also:  Witty recognized; Riley wins Chamber award; SC Launch recognized and more.
 
If you want to get the latest daily news about South Carolina, consider SCClips.com.

PALMETTO PRIORITIES

Palmetto Priorities Statehouse Report encourages state leaders to develop and implement Palmetto Priorities involving several issues to make the state better a better place. Click the link to learn more about our suggestions for bipartisan policy objectives.

Here is a summary of our Palmetto Priorities:

CORRECTIONS: Reduce the prison population by 25 percent by 2020.

EDUCATION: Cut the state's dropout rate in half by 2020.

ELECTIONS: Increase voter registration to 75 percent by 2015.

ENVIRONMENT: Adopt a state energy policy that requires energy producers to generate 20 percent of energy from renewable sources by 2020.

ETHICS: Overhaul state ethics laws.

HEALTH CARE: Ensure affordable and accessible health care.

JOBS: Develop a Cabinet-level post to add, retain 10,000 small business jobs per year.

POLITICS: Have a vigorous two- or multi-party political system of governance.

ROADS: Strengthen all bridges and upgrade state roads by 2015.

SAFETY: Cut the state's violent crime rate by one-third by 2016.

TAX REFORM: Remove outdated special interest sales tax exemptions as part of an overall reform of the state's tax structure to be completed by 2014.

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News

Finding a balance

Early trouble signs in state's changing health care paradigm

By Bill Davis, senior editor

JULY 1, 2011 -- Department of Health and Human Services Director Tony Keck is sticking by his guns.

Earlier this year, Keck, whose agency oversees the state’s beleaguered Medicaid program, said there would be no job losses caused by state reductions in the Medicaid reimbursement rates to health care providers, such as hospitals, health clinics and physicians’ offices.

A few weeks ago, the legislature passed a law that gave Keck the ability to reduce reimbursement rates, the first time a DHHS director was given this power.

Keck advocated for an immediate cut of about $30 million in rate reductions. These stirred the surface of a soon-to-be roiling pot. He also advocated and won a statewide reduction fight that will cause providers to lose an additional $125 million in reimbursements in the new fiscal year that begins today.

Hot on the heels of fresh reports of hospitals around the state making major cuts in the face of those state reductions -- which will be compounded by federal health cuts – Keck was asked this week if his prognostication of no job losses due to Medicaid cuts  was still solid.

Keck said yes, again. He also  projected a “net” job gain over the next year as a graying population and federal health care insurance reform increased patient loads, which would cause more people to be hired and increase the possibility of providers making more money than before.

“Look around you, the cranes are in the air,” Keck said of hospital expansions across the state. Keck, lured from a similar position in Louisiana, also said some health providers might lose some jobs in the short term, but not because of Medicaid cuts. Instead, any losses would be because of the health care industry's paradigm shift from current practices to a more "results-oriented" delivery model.

Additionally, Keck argued, providers knew for years these cuts were coming, and that they had been spared the axe longer than other sectors in the economy.

The size of the state’s health care industry varies according to which matrix you refer to, but the generally-accepted economic impact of the health care industry in the state is in the neighborhood of $35 billion annually.

While many respect Keck, some in the state’s health care provider industry disagree with his diagnosis.

“Don’t tell me we’re not going to lose jobs (as an industry) in the face of $125 million in cuts. Don’t insult my intelligence,” said Dr. Gerald Harmon, a Pawley’s Island general practitioner, as well as the past president of the state doctors’ association.

Ralph D’Alberto, president and chief executive officer of the rural Laurens Health Care System and hospital, disagreed, too. “Tony (Keck) is wrong about jobs. He’s totally wrong about that.”

The Laurens hospital is typical of stressed facilities around the state. It's rural with a high percentage of government health care insurance coverage that could be the most vulnerable to the cuts, according to Allan Stalvey, senior vice president of advocacy and communications director at the S.C. Hospital Association.

D’Alberto’s facility is in what he called the third phase of preparing for the fiscal impact of Keck’s hard-won reductions. He said that by this fall, his health care system, which has already cut some preventative community health care programs, could very likely see a total reduction in workforce of 10 percent, with remaining salaried workers hit with a 3-percent pay reduction for the rest of the fiscal year.

D’Alberto said Keck’s rosy jobs-gain predictions may come true in three years, or more, but for the next year, he doesn’t think Keck’s even close.

Both Harmon and D’Alberto praised Keck’s approachability, a departure in style from some DHHS leaders of the past, and willingness to work with providers. They both said they realized that the affable Keck had a job to do, but both pleaded that they be allowed to do their respective jobs, too.

Harmon described himself as a “dinosaur,” one of the few remaining general practitioners who will go to patients’ homes, forgive debts and work independently. He said Medicaid cuts would encourage more and more doctors to become specialists, where reimbursement rates are typically higher, or eschew private practice for “shift work” hospital jobs.

Harmon said the 12-physician group he’s a part of in the Georgetown area has already cut staff to the bone, with direct care providers being pressed into service of calling insurance companies and completing duties formerly reserved for office personnel.

Harmon said he knew he was breaking ranks with many of his colleagues in his belief that medicine and health care are too costly,  and that those costs must be reined in. But, he said, what Keck’s cuts didn't  take into account was that the numbers of Medicaid patients who will seek care from his office will not drop, even though the money will.

D’Alberto echoed that criticism, saying while his hospital was adding a new emergency room, it was because the numbers of patients seeking treatment in the old one went from 12,000 patients 20 years ago to 30,000 this past year. Three large hospitals in the state (MUSC and Trident in Charleston, and Palmetto Health in Columbia) say they will lose up to $51 million in the coming year due to Medicaid cuts, according to news reports.

Keck countered some of the criticism, pointing out that one of the private hospital systems had almost twice as much in profits than its projected cuts.

“This country has a huge nursing and doctor shortage,” said Keck. “Look at health care job posting sites. They have many open positions listed. The cranes are in the air.”

Keck also pointed to a recent national health care survey that found that 30 percent of health care budgets were “excess costs.”

Crystal ball: Keck has so far been able to do the previously unimaginable: pass down big cuts to providers and still hold their support. Many interviewed for this story said it was a result of his willingness to take the time to sit down and talk with providers, looking for solutions and explaining his reasoning equally well. And while many providers agree with his manner, grumbling persists about Keck’s cost-cutting methods. Both Harmon and D’Alberto, already saddled with arguing for one of the best paid industries in the nation, said a possible solution is to look for reducing the numbers who receive state-funded health care as a means of reducing strain on the system those who work in it.

Bill Davis, editor of Statehouse Report, can be reached at:  editor@statehousereport.com.

Legislative Agenda

Time out

The legislature has closed up shop for this year’s legislative session, and won’t likely have to return as a full body until January 2012. Until that time, some committees will meet sporadically.

Radar Screen

Stormy weather

The bloom is definitely off the rose in Columbia's relationship with Gov. Nikki Haley. Not only did House Majority Leader Kenny Bingham (R-Cayce) harshly criticize the governor on the floor of the House this week, but she was the focus of sharp words from departing SLED director Reggie Lloyd this week, too.

Haley drew Bingham’s ire over an education veto she’d put forward without warning to the House.  Lloyd complained that Haley overreached her power in trying to order SLED, which is supposed to be nonpartisan, to freeze spending.

How Haley further transitions to power over the next six months as governor will define whether she will have the same troubles with the General Assembly as did her predecessor, Mark Sanford. This could have been a litmus test for the rest of her tenure. If she wants to get away from the “Sanford-in-a-dress” catcalls, she had better show more disciplined leadership in the future.

Palmetto Politics

Ladies and Gentlemen: The Republicrats!

Democrats and the remnants of Gov. Mark Sanford’s allies in the Senate this week voted to create a new U.S. House congressional district that preserved Horry and Charleston counties in a single district. The problem: The S.C. House hasn't agreed with the Senate's plan because it had its own plan. Bottom line: Barring unexpected procedural machinations by a redistricting conference committee, the House and Senate won't agree later this summer, which means the federal court almost certainly  will draw the state's new congressional districts.

The Senate had struggled to come to its own plan to create a new 7th District during the regular legislative session, and returned to Columbia for the past three weeks, in part, to redraw those lines. Senate President Pro Tempore Glenn McConnell (R-Charleston) called the new coalition “Republicrats.”

Lost trust

Gov. Nikki Haley, who started the year on a high, ended the legislative session in the doldrums, spurred on in part by her own political ambition.

Haley angered many in the legislature by demanding the General Assembly return for an additional week to deal with parts of her political agenda that was not completed by the end of the regularly scheduled session. It was seen as either smart political theater – focusing attention on her agenda despite the presence of arguably bigger unfinished business, like the budget or redistricting – or as a senseless power grab easily quashed by the courts.

During the extended special session that just ended Thursday, her vetoes of education money caused members of her own party to attack her, especially House Majority Leader and former colleague Kenny Bingham (R-Cayce). The legislature quickly overrode most of her vetoes this week, including one that attempted to cut out funding for ETV.

Travel Kansas

The friendly folks at the Kansas Department of Travel and Tourism today offered a blog post by publisher Andy Brack that showcased some of his trip last week to the Sunflower State. The column includes some similarities and differences between South Carolina and Kansas.

Commentary

Budget board may not be broken

By Andy Brack, editor and publisher

JULY 1, 2011 -- Now that action on whether the state will create a new Department of Administration to replace the Budget and Control Board can't happen until next year, maybe it's a good time to ask these questions:

Is such a change even needed? What's so wrong with the hybrid budget board and its three constitutional officers and two legislators that it needs to become a cabinet agency overseen by the governor?

Changing to a Department of Administration would be basing more of South Carolina's state government on the federal cabinet system, which hasn't worked that well in Washington, argued Harry Miley, an economist who chaired the state Board of Economic Advisors for GOP Gov. Carroll Campbell.

"Why would we want to model something after an inefficient model?" he asked. "Where is the evidence that the Budget and Control Board doesn't work?"

The board has come under fire in the administration of Gov. Nikki Haley because she wants it under the governor's purview, instead of being run by a five-member board chaired by the governor. Other members include the state treasurer, comptroller general and two legislative officers -- the chairs of the House Ways and Means Committee and the Senate Finance Committee.

Critics of the board complain that having legislative members on what should be an executive branch board blurs the lines of responsibility and is legislative meddling in administrative matters. [The state's courts settled this long ago and said the budget board was constitutional.]

KEY DATES FOR THE
BUDGET AND CONTROL BOARD

1933: A temporary Appropriations Act provision established the State Budget Commission to present an annual budget recommendation to the legislature.  Members were the governor and the chairs of the Ways and Means Committee and Senate Finance Committee.

1945: A major report by a statewide commission was issued outlining the structure and duties of what would become the Budget and Control Board.

1950: Gov. Strom Thurmond submitted a reorganization plan that called for the board's creation, saying it would "result in improved efficiency and greater economy in our state government." The General Assembly approved the board overwhelmingly.

1960s-70s: The board took on new functions -- general services, research and statistics, personnel, employee health insurance, the Board of Economic Advisors, motor vehicle management.

1977: The state Supreme Court ruled the presence of legislators on the board isn't an unconstitutional violation for the separation of powers.

1995: The board got its first Republican majority.

2001: Governing magazine gave the board's Office of Human Resources the nation's top rating.

One former high-level state official who asked not to be named highlighted two huge successes by the board: Hurricane Hugo recovery and restructuring in 1993.

During the Campbell administration, the budget board was able to work effectively to coordinate relief efforts and allow the state to recover two or three years more quickly than expected after the 1989 hurricane. Some say the structure of the state budget board actually helped the process because it was able to move around money efficiently, maximize federal grants and put people in the field to help impacted communities.

Former Rep. Billy Boan of Kershaw, who was Ways and Means chairman after Hugo, recalled the state was able to recover from Hugo without a tax increase.

"We [on the board] were able to manage through that in a pretty tight recessionary times," said Boan, who later served as chief of staff to Gov. Jim Hodges. "We were able to manage that with our process. It worked well."

Another success was in 1993 when the Budget and Control Board took the lead in collapsing 189 state agencies into 69 state agencies, including creation of 13 cabinet-level agencies. It took about a year, but legislative and executive leadership through the board facilitated success.

Boan said when he moved to the executive side of the table as Hodges' chief of staff, he observed that having the hybrid board seemed better for procurement of major projects.

"I think major procurements are better when they have broad representation," he said. "There's more integrity in the process when it is spread among five elected officials than any one. Sometimes, it's better for those things to be played out by having broad oversight."

By having an executive-legislative board, the structure generally requires members to communicate. But this strength can become a disadvantage if the five members don't work together to help the state and instead pursue their own agendas. 

Does that mean a new agency -- a Department of Administration -- will "fix" anything? Probably not. It will just concentrate power in a new way. And that system will have flaws too -- especially if a governor ignores or tries to bypass the legislature.

"Even now, nobody is suggesting changing the system is going to save a whole lot of money," Boan observed. "It's swapping one organizational chart for another."

In the six months before the General Assembly convenes for the second part of its two-part term, lawmakers should be thoughtful about whether changing the budget board really is the best thing for South Carolina. Get past the rhetoric. Challenge assumptions. Slow down the reform train and see if the change is even needed. Why fix something that might not be broken?

Andy Brack is publisher of Statehouse Report and can be reached at: brack@statehousereport.com.

Spotlight

Maybank Industries

The public spiritedness of our underwriters allows us to bring SC Statehouse Report to you at no cost. This week's featured underwriter is Maybank Industries, LLC of Charleston, SC With broad experience in commercial and government operations, Maybank Industries applies deep-rooted commitment to teamwork, reliability and personal service to provide innovative business solutions for project development, information technology, logistics, vessel design, shipping agency services and marine terminal operations, both locally and internationally. Maybank Industries applies a powerful blend of professional expertise to research, analyze and develop tailored solutions with thorough plans of action, combining a heavy dose of common sense to solve today's needs that can adapt to changing or evolving requirements. More: Maybank Industries and Maybank Systems.
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Scorecard

Colbert to Haley to Ard

Colbert. South Carolina native and cable comic pundit Stephen Colbert won a partial victory this week with the Federal Election Commission in his attempts to form a Super PAC. The downside: He’s showing everyone on FOXNews how it’s done. More.

Haley. Bad finish to your first legislative session with gubernatorial appointees shaking a finger on their way out the door, the majority leader in the House in your own party taking you to task for gaffes, and not getting your restructuring or Department of Administration on the books. Better luck in January.

Redistricting. The Senate’s U.S. House redistricting plan doesn’t resemble the House’s version, and has few mainline GOP supporters, and will, as foretold, be resolved by the federal government, according to sources in Columbia, which will probably favor Democratic Party interests.

Ard. Lt. Gov. Ken Ard’s ethical transgressions surpassed Sanford? Really. More.

Stegelin

Broken pen


Also from Stegelin: 6/24 | 6/17 | 6/10 | 6/3
credits

Statehouse Report

Editor and Publisher: Andy Brack
Senior Editor: Bill Davis
Contributing Photographer: Michael Kaynard

Phone: 843.670.3996

© 2002 - 2018 , Statehouse Report LLC. Statehouse Report is published every Friday by Statehouse Report LLC, PO Box 22261, Charleston, SC 29413.
Excerpts from The South Carolina Encyclopedia are published with permission and copyrighted 2006 by the Humanities Council SC. Excerpts were edited by Walter Edgar and published by the University of South Carolina Press. Statehouse Report has partnered with USC Press to provide readers with this interesting weekly historical excerpt about the state. Republication is not allowed. For additional information about Statehouse Report, including information on underwriting, go to http://www.statehousereport.com/.