S.C. budget board mulls steep cuts as revenue falls
By JIM DAVENPORT, The Associated Press Monday, December 14, 2009COLUMBIA, S.C. (AP) — School, health care, social service and prison agencies are about to catch another round of budget cuts Tuesday as the state’s financial oversight board tries to keep a $5.3 billion spending plan from falling apart.
Tuesday’s reduction is expected to be a minimum of 2.6 percent, or $122.4 million, but that may not be nearly enough to cover problems looming in tax collections as the state’s jobless rate remains among the nation’s highest.
For now, the planned reduction would take $53 million from public school spending; $20 million from the state’s Medicaid programs and more than $3 million from the Department of Social Services. Meanwhile, the state Department of Corrections would lose $8.3 million and is asking the Budget and Control Board to allow it to run a deficit of $13 million.
Education Department spokesman Jim Foster said the losses for public schools are another blow. They lost $513 million in the previous fiscal year and have already lost $217 million this year, Foster said.
During the past 18 months, state revenue projections have fallen by more than $1.6 billion as workers have lost jobs and consumer spending has slowed. Even after the Legislature and board made $973 million in budget cuts last year, South Carolina finished its fiscal year in June $98 million short after wiping out its two rainy day accounts.
And since the new fiscal year started in July, South Carolina has tapped its rainy day funds again and in September cut agencies by 4 percent, or $200.5 million.
The 2.6 percent recommended cut just isn’t enough, board members say. State Treasurer Converse Chellis said he wants a cut of up to 5 percent to cover that $98 million and to make sure the state doesn’t end up borrowing money again to close its books. Meanwhile, House budget committee chairman and state Rep. Dan Cooper said a minimum of 3 percent is needed.
And the cuts may need to go higher for other reasons, as well, Chellis and Cooper noted, including making up the $98 million shortfall from last year; covering deficits at the state’s prison and juvenile offender programs; restoring the state’s primary rainy day account and making sure the state has enough money to cover payments on bonds that will be issued to cover costs tied to a Boeing Inc. expansion in North Charleston.
Chellis said the reductions can mean bad news for state workers who face job loss or more of the unpaid leave that’s strained budgets.
“When you don’t have the money, you’ve got to cut back,” Chellis said.
State Department of Health and Human Services director Emma Forkner said last week she didn’t know how she could deal with a cut of 4 percent or more, but may have to run a deficit. That’s because the federal stimulus law that pumped money into her agency bars spending reductions and state legislators passed a budget that prevents her from reducing most payments to Medicaid care providers.
Kathleen Hayes, director of the state Department of Social Services, said the timing couldn’t be worse for an agency that provides food stamps and welfare payments.
Since January 2007, demand for food stamps has grown from around 550,000 people to about 730,000, Hayes said. The demand soared as DSS laid off 45, lost funding for 350 jobs, and forced all of her staff to take unpaid time off through furloughs.
“It’s unbelievably difficult right now. We are seeing caseloads right now higher than ever in the history of the state,” Hayes said. “I’m worried about any additional cuts that might come up. There’s just nowhere else to turn.”
Smaller agencies don’t know how they’ll deal with cuts of any size. For instance, the state’s Parole and Probation Department would lose nearly $415,337 from a $15 million budget with the proposed 2.6 percent cut.
“It’s going to be tough. You know, we’re down 100 agents now,” said Sam Glover, the agency’s director. The agency supervises 33,000 law offenders around the state to make sure they’re following parole or sentencing requirements.
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