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Budget cuts will cause job losses, fewer services
By Andy Brack
SC Statehouse Report

FEB. 23, 2003 - - Advocates of smaller government must be grinning like Cheshire cats as most state agencies prepare to make even more budget cuts.

But many taxpayers might not fully comprehend what it all will mean: longer waits in lines, loss of college scholarships, state employees who will lose jobs, others who again won't get a pay hike and some agencies that just won't have money to do all of the things they're required by law to do.

It's not a pretty picture.

Last year, lawmakers passed a budget allocating more than $5.4 billion to pay for state government. After two mid-year cuts totaling more than $400 million, lawmakers started deliberations this week with a reduced base of about $5 billion. After deciding K-12 education, Medicaid and a handful of other programs won't be impacted a lot by budget cuts, other agencies will have to shoulder the burden of cuts. On top of two midyear budget decreases, they'll have to slash another 10 percent next year from their reduced base

By July 1, agencies will start RIFs - - reductions in force - - or furlough programs to save money. This week, House Ways & Means Chairman Bobby Harrell floated a trial balloon to cut millions in lottery-funded technical college scholarships. After an angry reaction, he backed off. But the next day, the committee voted to end lottery-funded HOPE scholarships for students at four-year colleges. The outcry likely will be similar.

Therein is a big problem for state budget writers. If lawmakers find the courage to target specific programs, not only are they accused of micromanaging, but they're likely to rile vocal groups who benefit from the programs.

The other approach is to make across-the-board cuts. While you might think that spreads pain evenly, it really allows bad programs to remain funded and causes smaller agencies to take a disproportionate share of the hit. (Larger agencies can absorb cuts easier, many would argue, because they have more overall money.)

One leader of a small state agency said this week in an interview that he'd rather the General Assembly take the first approach - - to look at programs and delete them completely, instead of making all agencies take the pain together. That's because all of what his agency does is required by law. With percentage cuts, his agency still is required by law to perform its mission.

"When they tell us, 'You've got to cut more,' my question back to them is, 'What part of the law don't you want me to enforce?'"

The head of a medium-sized agency said it would be much easier for him if the General Assembly got rid of programs that weren't efficient or duplicative. By instituting across-the-board cuts on most agencies, the General Assembly essentially requires agencies to do their jobs without providing necessary funding. In other words, lawmakers are creating unfunded mandates (something Republicans at the federal level went nuts about a few years back.)

"We're beyond cuts to the bone and are siphoning off blood," said the official, who asked not to be identified.

The problem, this agency head admitted, is there's no real way that citizen-legislators have the time or expertise to determine exactly which programs aren't working.

A former agency head with the Hodges Administration observes the best way for lawmakers to make smart cuts may be to require all agencies to develop strategic and accountability plans. Some already do.

With more data, agencies can develop a better understanding of which programs are not working. Legislators then can instruct agencies to develop and recommend various budget-cutting scenarios based on eliminating or reducing low-performing programs. Then elected officials can use performance information to tell agencies exactly what to trim. Programs that are working well and providing good services will tend to be less affected by cuts.

This third way of cutting makes sense because it allows the General Assembly to make cuts based on performance data. As it stands, many of the cuts will harm agencies that are operating efficiently and maintain those that are working poorly.


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