Avoiding the cliffState agencies brace for Washington D.C.’s falloutBy Bill Davis, Editor DEC. 21, 2012 --Thanks to the Mayans being wrong, three state government agencies that rely in large parts on federal funding will still have to wrestle with potential funding cuts should a deal not be struck in Washington, D.C., to avert the nation going over the so-called “fiscal cliff.” In 10 days, the federal Budget Control Act is set to expire. That act requires deep and automatic federal tax cuts if a new budget deal is not struck soon in Washington.  And that could have serious ramifications in South Carolina, as nearly one-third of the state’s overall fiscal year budget is dependent of federal funding and pass-through dollars.
But all three agencies – Transportation, Education, and Health and Human Services, which oversees Medicaid – expressed optimism that a deal will be struck and that they will have adequate funds to weather any extra time Congress and the White House take crafting a deal. S.C. Education Deputy Superintendent Jay Ragley said most of the potential federal cuts would be passed down to local school districts with the most onerous ones hitting schools with high poverty and lower literacy rates. Ragley said while the overall cuts numbers his agency had been provided with are very large on their face, their impact would be offset by the relatively small amount they represent in K-12 funding. Ragley said the total school funding is close to $880 million, including all sources – federal, state and local. Ragley noted: - The Congressional Budget Office has estimated that if the cliff is not avoided, then the state, including money sent directly to school districts, could see a 7.8 percent cut totaling roughly $68.7 million. That calculation is based on the presumption that each state would be treated to equal cuts.
- The Bipartisan Policy Center put the likely percentage at 12 percent, which could result in $105 million in cuts.
Ragley said that as hard as the cuts may be for poorer school districts, it would only represent between 0.8 and 1.3 percent of total revenue for school districts in the 2010-11 fiscal year. Thanks to added flexibility in spending championed by state Superintendent of Education Mick Zais and passed into law this year by the General Assembly, many districts may be able to offset the drops in funding until a deal is worked out later, Ragley agreed. Picking a path If all roads lead to Rome, then they all start in Washington from which massive stimulus packages for infrastructure improvements to highways and bridges have flowed since President Obama took office. S.C. Transportation Secretary Robert J. St. Onge has said it would take more than three-quarters of a billion dollars to get the state roadways and infrastructure to “good.” Transportation spokesman Pete Poore today said the agency could face an automatic $4 million federal cut in discretionary programs. As for highways, the federal government has not informed the state agency how much could be at risk, he said. Poore also said that other cliff cuts could result in “very low balances” in some of the agency’s program accounts. In the timing For state Medicaid czar Tony Keck, who heads up the state Department of Health and Human Services, it’s all in the timing.  Like the other agencies, Keck complained the feds have not shown their entire hands when it comes to the fiscal cliff, but that his agency had “some” money on hand to wait out a deal.
Keck said while no one expected the federal wrangling to drag on much past the new year, he added if the automatic cuts are instituted for six months or so, his agency and its programs could deeply impacted. What Keck said he was most concerned about was expected changes in health care provider federal tax rates. Big changes could result, in his words, to “a price war” between doctors and providers who rely on state-insured patients versus other who rely on federally-insured patients. While his agency just received a $2.4 million bonus from the feds for improving children’s access to Medicare, it would do little to offset potential cuts -- especially since federal observers see big cuts coming for health care and social services, whose growth in state budgets have been deemed unsustainable. Crystal ball: In some regards, what state governments like South Carolina’s are dealing with is the second half of the Great Recession. State stimulus packages from the Obama Administration may have bolstered revenues for a while, but they are now long gone and the bite of further reduced federal spending is being felt, irrespective of the short-term issue of the fiscal cliff. In short, the economy may have bottomed out and begun to climb, but state government’s fiscal health will continue to lag, according to observers and experts.
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A quiet holiday weekWith Christmas on Tuesday, major state meetings have been pushed off to the first week of the New Year. The legislative session will begin Jan. 8, 2013. - Judiciary. A subcommittee will meet Jan. 3 at 11 a.m. in 308 Gressette to discuss a bill that would clarify economic statements of interest requirements for candidates for public office, the very issue that deleted hundreds off the ballot this November. Agenda.
- Budget. The Joint Other Funds Oversight Committee will meet Jan. 4 at 10 a.m. in 105 Gressette to discuss interim budget adjustments. Agenda.
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The $11 billion questionLook for debate to get hotter in the weeks ahead as lawmakers determine whether to accept $11 billion in federal funding that will be available through 2020 to expand Medicaid coverage through the Affordable Care Act.
A proponent, the S.C. Hospital Association, is pushing a video that outlines why it would be dumb for the state to forgo the infusion of money that would pay for much-needed health care via Medicaid for around 236,000 poor and uninsured residents. With the infusion of federal dollars, the state would create 44,000 new jobs, $1.5 billion in additional wages and $3.3 billion in state economic activity through 2020, the SCHA says.
But if the state does not expand Medicaid with the Obamacare money, state hospitals will have to absorb more than $2.7 billion in payment cuts, which will make it more expensive for all of us and could reduce services, the association says. Currently, more than 60 hospitals in South Carolina provide care to people who can’t pay. So accepting the money -- which we’re essentially getting back from the federal taxes we already pay -- will help keep costs down for all of us because hospitals will be reimbursed for charges they’ve been offloading on insured folks.
The decision is pretty simple: take the money and use it to help 236,000 people and generate lots of new jobs and economic activity (good) or keep our heads in the sand, which will increase costs and reduce services (bad).
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Executive budget skirts gas tax hike Gov. Nikki Haley, pictured at right, presented her executive budget this week for the 2013-14 fiscal year. The $6.3 billion for the General Fund budget proposal is 3 percent bigger than the current fiscal year.  It skirts a gas tax hike to raise funds for needed roads improvement with promises of funds from other sources as they become available. There have been considerable amounts of extra tax income in state coffers beyond state projections for the past few years.
Critics and observers contend, though, that the gap between projections and extra money will likely shrink to nothing this year, so some are wondering if Haley isn’t playing politics here. Haley also wants to do away with the top state personal income tax bracket, reducing the top rate from 6 percent to 5 percent for top earners. The budget also included loan payments in the millions related to the Department of Revenue hacking incident earlier this year. Sic itur ad astra Former state Rep. Bessie Moody-Lawrence of Rock Hill, a Democrat, passed away this week at 71 from brain cancer. She was nicknamed the “Velvet Hammer” for her style of fighting for education and health care improvements.
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State should lead in reducing gun violenceBy Andy Brack, Publisher DEC. 21, 2012 -- As predictable as the rising sun, gun sales rose after the Newtown, Conn., school massacre.  Some people across the country seem to think the government is going to take away their firearms. Folks, that just isn’t going to happen. It won’t work, just like Prohibition didn’t work with alcohol. With 300 million guns in a nation of about 315 million people, there’s no practical way to get rid of all of the guns, despite how some Americans might want to do so.
What can happen, however, is a more reasonable approach to gun laws with an eye to reducing the violence across America. The overwhelming majority of Americans who own guns handle them responsibly. What we need to do to reduce gun violence is to enact policies to keep guns out of the hands of crazy people and violent criminals. Just look to Australia, where a single person killed 35 people and wounded 23 others in a 1996 shooting spree in Port Arthur, Tasmania. Soon after the bloodbath, Australia’s leaders made a conscious decision to tighten its relatively lenient gun laws by banning assault weapons, creating tougher licensing requirements and paying for gun buyback programs. The laws have worked, The New York Times reported, with firearm homicides between 1995 and 2006 dropping 59 percent. “In the 18 years before the 1996 laws there were 13 gun massacres resulting in 102 deaths, according to Harvard researchers, with none in that category since.” Other countries with tough gun restrictions include Great Britain, which had 32 gun deaths in 2008, compared to more than 11,000 in the United States in the same year.  So it’s time for creative thinking to figure out how to reduce violence without taking away rifles and shotguns for hunters. Personally, I don’t believe in the plethora of handguns because they’re too easy for people to turn to in the heat of the moment to solve problems violently. I realize, however, that if handgun owners have proper training on use and safety, handguns pose less of a societal threat.
Here are some ideas that South Carolina lawmakers could look at -- regardless of any federal action -- to make the state safer: - Ban assault weapons and high-capacity magazines. While it is fun to shoot semi-automatic weapons at a gun range, there’s really no need for them. If someone wants to shoot a rifle, fine. But shooters should only be able to use firearms that have one shot per trigger pull.
- Keep guns from felons. South Carolina could pass a law banning ownership of any firearm by a convicted felon. If a felon is caught with a gun, he should go back to jail.
- Ban unregulated gun shows in the state. If people want to buy a gun, they should have to undergo extensive background checks like in stores. They shouldn’t be able to avoid checks by purchasing guns at shows.
- Use technology to track purchases. Currently, the state tracks the sale of some cold medicines at pharmacies because people were turning the medicine into methamphetamine. Why can’t we create a central database for guns sales that is automatically updated so state officials know who is buying guns and how often? As one wag noted, it doesn’t make much sense to control how much fat defines milk if we can’t responsibly track guns.
- Ban or regulate sales of violent video games from our stores. While this suggestion might not pass constitutional muster, South Carolina should start taking control of the culture of violence that’s portrayed in violent video games and through the media by requiring content controls.
- More mental health funding. Since deinstitutionalization of mental health facilities starting in the 1980s, more people with problems have ended up on the streets. The state needs to figure out ways to provide more mental health services for people who might be on the edge.
There are scores of other ideas that can be explored without infringing tremendously on the Second Amendment. But as one mayor pointed out, gun owners also need to remember that the first 20 words of our Constitution includes language to “insure domestic Tranquility.” With a too-permissive gun culture, we cannot have peace in our communities. Just visit Newtown.
Andy Brack is publisher of Statehouse Report. You can reach Brack at: brack@statehousereport.com.
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S.C. Policy Council  The public spiritedness of our underwriters allows us to bring Statehouse Report to you at no cost. This issue's underwriter is the South Carolina Policy Council. Since 1986, the Policy Council has brought together civic, community and business leaders from all over our state to discuss innovative policy ideas that advance the principles of limited government and free enterprise. No other think tank in South Carolina can match the Policy Council's success in assembling the top national and state experts on taxes, education, environmental policy, health care and numerous other issues. That ability to bring new ideas to the forefront, lead the policy debate and create a broad base of support for sensible reform is what makes our organization the leader in turning good ideas into good state policy. For more information, go to: www.scpolicycouncil.com.
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Real education reform: Burn down the boxBy Jon Butzon
Special to Statehouse Report DEC. 21, 2012 -- A small, dedicated group of education and business leaders spent the last several months looking at the need in South Carolina for innovation in public education. The report and recommendations of the Innovation Initiative Steering Committee were published in October of this year.  This report provided a rationale for why South Carolina must pursue an agenda of innovation in its public schools, neatly summed up in one sentence “The basic framework of our current public education system is built upon the needs of the past.” While the world has been transformed, even in South Carolina, our system of public education has remained steadfastly the same and it is not working.
In a recent policy brief from the American Enterprise Institute for Public Policy Research, Dr. Jal Mehta of the Harvard Graduate School of Education wrote: “Despite nearly 30 years of K–12 school reform efforts, the United States still has substantial gaps in student achievement by race and class. To make more substantial progress, reformers must question conventional assumptions and more aggressively reshape key aspects of the American school system.”
Mehta goes on to observe that when so many reform strategies we’ve tried over the years fail to achieve the desired results at scale: “... we ask what is wrong with the reform, when we should instead be asking what is wrong with the system.” "It will not be enough to 'think outside the box.' In point of fact, few, if any of us can really “think outside the box.” As long as the box is there, we will think inside the box. The great innovators have always known that real innovation comes only when you 'burn down the box.'"
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So, when we talk about “education innovation” in South Carolina, we cannot talk about reading programs, or longer school days and longer school years, or anything that is the “same old” with a new name and a new coat of paint. We have to start at the very foundations and the system itself: its purpose, its governance, its organization, its staffing and its results.
This will require a level of courageous, bold leadership uncommon in public education. It will also require a new vision, also uncommon in public education and difficult for many to achieve. It will not be enough to “think outside the box.” In point of fact, few, if any of us can really “think outside the box.” As long as the box is there, we will think inside the box. The great innovators have always known that real innovation comes only when you “burn down the box” -- when you free your thinking from the constraints of “we’ve always done it this way” or “what was good enough then” or “we’ll never get approval” or “we cannot afford it,” just to name a few. Where to start? Let’s start by “innovating innovation.” Instead of approaching this like every other education reform initiative by establishing public/private partnerships and networks and pipelines of best practices and proven strategies, let’s set the expectation, set the stage, and get out of the way. First, let’s begin by setting expectations for defined performance results for every school. Instead of telling schools and districts how to educate, or how to innovate, let’s define the outcome and then expect them to perform as professionals. As long as it’s legal, moral, and ethical, we shouldn’t care what is done to innovate or to produce the required results. We can facilitate this step by deregulating public education. The state Superintendent of Education has proposed a reduction in regulation, but it languishes in bureaucratic limbo. Let’s rethink teacher certification. If we are going to hold districts and schools accountable for results, why should we care who they hire to teach high school chemistry, for example, as long as students are successful at meeting content standards? There is plenty of evidence that many certified teachers are unable to achieve this. Could a retired graduate chemist fill the bill even if she doesn’t have a degree in teaching? Hire the people who can produce. Or else. There is no shortage of ideas for real innovation. There are some great ideas out there. I am interested in those thoughts and ideas. I am inviting you to share them. I will certainly take the time to read them and we’ll find a way to share them more widely. - If you are interested in the report and recommendations from the Innovation Initiative Steering Committee, you can find it here.
Jon Butzon is executive director of the Charleston Education Network. You can reach him at: cen@charlestonednet.com.
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Up for Haley, down for Sanford Haley. Spurred by the Newton, Conn., tragedy, the governor has called for millions more for state mental health programs. More.
Jobs. The state’s unemployment numbers dropped for the fourth month in a row in November; this time from 8.6 percent to 8.3 percent. More. Jobs. Aerospace giant Boeing is looking to double its current acreage in the Charleston area. More. Scott, Tim. Gov. Nimrata “Nikki” Randhawa Haley, whose Indian parents are Sikhs, appointed a black man, Congressman Tim Scott, to a seat in the U.S. Senate to replace a white dude, the retired Jim DeMint, a fellow Republican. In South Carolina. Yes, really. More. Sanford, Mark. Running for his old seat in Congress would be a better idea if only he was from Alaska. More. Guns. Fear of tighter gun control following the Newton, Conn., shootings has driven gun sales across the state. That’s like Kirstie Alley advocating more Dove bars. Stupid. Prefiled bills in the House include potential laws that would allow teachers to carry guns, make federal health care reform efforts a felony, and … we’ll let’s just say this is going to be weird session.
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