News - Local/State

Saturday, May. 24, 2008

'Lean' state budget spares schools but cuts most agencies' spending

COLUMBIA -- The $7 billion spending plan state lawmakers approved Thursday cuts most state agencies but also adds new money for K-12 education and health care and a small raise for state employees.

With very little new money available, lawmakers had to borrow from reserve accounts and focus on core services. As a result, Senate negotiators held a hard line and eliminated any local projects that could be considered pork or wasteful.

State agencies will need to squeeze more out of budgets trimmed between 2.5 percent and 5 percent. Agencies will be able to use money not spent in previous years to weather the cuts, a change the General Assembly allowed after the last state recession.

"A lot of agencies are very creative if you give them the ability to move money," said Senate Finance Chairman Hugh Leatherman, R-Florence.

The cuts include the Department of Corrections, which has announced a $4.3 million deficit this year and could be in the red again for the budget year beginning July 1.

State workers will receive a 1 percent raise next year but will not have to pay any additional costs for health insurance.

The budget also adds or maintains funding for HIV/AIDS drug treatment, cancer screening and treatment, and tourism advertising.

"We're so grateful to get it," said Bambi Gaddist, a community activist and advocate for HIV/AIDS treatment, noting the difficult choices legislators had to make. "This ($2.4 million) allocation is critical to the lives of people trying to stay healthy, stay at work and trying to support their family."

Lawmakers also decided to keep funding State Conservation Bank land preservation efforts.

Among the final additions was $10 million in grants to advertise S.C. tourist sites. The grants must be matched 2 to 1 with private dollars. The money was in the House budget but had been cut by the Senate.

Brad Dean, executive director of the Myrtle Beach Chamber of Commerce, said past campaigns using the matching funds have raised interest in the Grand Strand.

With the U.S. dollar weak against Canadian and European currencies, Dean said, Myrtle Beach could benefit from new business -- and the state from new tax revenue. Ads targeting Cleveland, Cincinnati and Atlanta also have been successful, Dean said.

"In spite of having to make some very tough budget cuts, the General Assembly realized tourism could be part of the solution," Dean said.

But those additions came at the expense of other items, such as additional mass transit funding. Also scrapped or scaled back are grants to promote hydrogen research, a plan to purchase replacement school buses and expanding 4-year-old kindergarten.

"They depend on rural transportation authorities," Rep. Joe Neal, D-Richland, said of workers and businesses. "It's economic development for rural communities."

Rep. Jim Merrill, R-Berkeley, said the state was not spending enough to market tourism, citing $2 million in advertising that was eliminated. "I hope this doesn't come back to bite us," Merrill said. "The spillover effect touches every segment of the state."

The budget now heads to Gov. Mark Sanford, who can veto specific items within the bill. Lawmakers then would have to vote to sustain or override those vetoes.

"It's not a mean budget," said Sen. Harvey Peeler, R-Cherokee, "but it's a lean budget."