The five-member State Budget and Control Board - consisting of the governor, two legislators, the state treasurer and comptroller general - will decide today how much the state will trim spending. New revenue estimates say South Carolina will take in less than was expected when lawmakers passed the state's $5.3 billion spending plan in June. The cut, expected to take an equal percentage from all state agencies, will be at least $120 million. What the cuts mean for state government:
More red ink
The S.C. Department of Corrections, which has been running a deficit for two budget years, could see its budget deficit grow to $13 million. The state Department of Health and Human Services may have to run a deficit because the federal stimulus law that pumped money into that agency bars spending reductions, and state legislators passed a budget that prevents reducing most payments to Medicaid care providers.
Education takes biggest blow
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South Carolina spends the most money on K-12 public education, and it is taking the biggest hit. Public schools could lose $52 million. Those cuts come on top of losing $513 million in the previous fiscal year and having already lost $217 million this year, according to the State Department of Education.
While Congress is discussing a health care reform plan that could add 500,000 new Medicaid enrollees, the program could take a $20 million hit with a cut today. Regardless of federal health care reform, demand for Medicaid is growing as unemployment in the state is forcing more residents into social safety nets.
Jobs in jeopardy
State agencies warn continued cuts are more likely to result in job losses. The previous cuts were mainly absorbed by instituting furloughs and hiring freezes and laying off retirees who have returned to work under the TERI program. With those options exhausted, agencies are more likely to look at cutting workers.