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2002-2004, South Carolina Statehouse Report. Published weekly during the S.C. legislative session. South Carolina Statehouse Report is a media project of The Brack Group, Charleston, S.C.

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1.09: Layoffs, service cuts loom in budget
(Week of March 5, 2002)

MARCH 1, 2002 - - Lobbyists, citizens and state employees are starting to understand what a proposed House budget by the Ways & Means Committee could mean: layoffs at some already hard-hit agencies, cuts in health care protections for the poor and elderly and reductions in a variety of services.

The state faces a shortfall of up to $350 million in funding to maintain next year's programs at the current level. Agencies currently are operating with at least 4 percent revenue following this year's mid-year budget cuts. Even though the state appears to be heading slowly out of recession, the real impact to the budgeting process has a lagging effect: there's less money coming in, which means somebody is going to do without some services unless revenues increase or agencies find savings. In these times, the latter is unlikely as many agencies used one-time monies or reserves to generate enough cash to meet the mid-year cuts.

Next week, House members will learn more about the budget in a special briefing session at 2 p.m. Wednesday in the Blatt Building in Columbia. It's open to the public.

Here's what they'll learn:

Medicaid. Poor children and the elderly may face stiff service cuts. Because of rising costs of services and a growing service population, the state Department of Health and Human Services has to come up with an additional $185 million to maintain services at existing levels . Two years ago, the state raided tobacco settlement monies to generate $100 million in funds to maintain the program. Last year, it generated a similar amount by recouping from the federal government a share of services already performed. But this year with state funds being extremely limited, such one-time options are exhausted.

The Ways & Means proposal appears to generate about $50-60 million in new Medicaid funding - about $130 million less than needed. It gets only worse. If you consider the state's portion of Medicaid funding is matched with three times as much federal money, South Carolina is poised to lose up to $500 million in Medicaid funds that pay for doctor fees, prescriptions and hospital services.

Bottom line: if the current proposal becomes law, a lot of South Carolinians are going to receive less or no health services. More than likely though, health professionals, advocacy groups and other agencies that receive spinoff funding from Medicaid monies are going to kick into high gear to lobby for increases in funding to ensure South Carolina is able to generate all of the matching federal money it can.

Education. In the current budget year, K-12 education absorbed a 4 percent across-the-board cut by resorting, at the local level, to one-time monies and reserves, sources say. The proposed House budget makes those cuts permanent. And that means, education advocates say, a shortfall of more than $70 million. Because one-time monies and reserves are dwindling, school districts may have to hire fewer teachers next year and increase class sizes.

Mental health. The state Department of Mental Health faces a $4.1 million cut of on a $183 million budget. At first glance the 2.3 percent cut may not look like much, but considering the agency has been involved in layoffs and is reducing its force more now, additional cuts will cause more layoffs - - and stretch services even more thinly.

Big cuts. Other agencies that face big cuts include the Forestry (11.9 percent), Alcohol and Other Drug Abuse Services (11.8 percent), Commerce (9.7 percent), Labor (8.8 percent), State Library (7.2 percent), Archives (7.6 percent), Clemson Extension Service (4 percent) and more. The House cut itself and the governor's office about 4 percent. It didn't touch the Senate's budget.

No cuts. Several agencies appeared to receive no cuts, including: Adjutant General, Election Commission, Commission on Minority Affairs, Department of Corrections, Judicial Department, Board of Technical and Comprehensive Education, and the Procurement Review Panel.

Increases. Agencies that received increases tended to be education or security agencies: Department of Public Safety, State Law Enforcement Division, Department of Juvenile Justice, Commission on Higher Education and the Department of Revenue.

11/3: Use your vote wisely: a lesson
10/27: SC GOP to keep control of House
10/20: Black voters may be secret weapon
10/13: Talk is cheap; action takes courage
10/6: Creating sunshine to dampen negative ads
9/29: SC Set to be world leader in news research
9/22: SC Senate shift could be around corner
9/15: Gov's race about barbs, ads, not people
9/8: Shorfall may cause look at prison alternatives
9/2: Revitalize your patriotism by participating
8/25: S.C.'s fiscal situation could be a lot worse
8/18: State wetlands policy needed
8/11: The bully vs. the whiner
8/4: Noah's Ark approach to tax reform
7/28: Two-party system could be political outcome
7/21: State budget woes loom for 2 more years
7/14: Agencies can do better job on Internet
7/5: Thank a guardsman today for service
6/28: Hodges-Sanford race will be wild ride
6/21: Sanford-Peeler race's impact on GOP
6/14: Ethics reform needed now

More done than you'd think(1.23)
More education $ also means cuts (1.22)
PSC reform to come, but when?(1.21)



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