This week the House was furloughed pending the Senate's action on the Financial Year 2009-FY'10 budget. The budget sent to the Senate by the House had the following highlights:
FY 2008-09 Recurring General Fund Base $5,864,332,111
FY 2009-10 "New" Recurring General Fund Revenue ($334,764,684)
Most agencies not already at or below the FY 2005-06 funding level were taken back to that level. In addition, targeted reductions were taken in agency travel budgets.
The budget contains a provision that states it is the intent of the General Assembly to accept funds from the State Fiscal Stabilization Fund in the American Recovery and Reinvestment Act (A.R.R.A.).
STATEWIDE ITEMS: The required General Reserve Fund contribution of $63,923,944 was included to restore the General Reserve Fund to the level required by the SC Constitution. The local government fund was taken back to the FY 2005-06 funding level, a reduction of $49,947,911. The State Employee Health Insurance Plan is allowed to reduce reserves to the extent necessary to pay claims with no increase in enrollee rates. The Home and Community Based Services Program, which provides meals for seniors, was funded at $1,000,000. In addition, this program is expected to receive funds through the A.R.R.A.
EDUCATION: The EFA was funded at the 2005-06 level; this is a reduction in General Funds of $92,997,824. $166,626,600 of the A.R.R.A. funds from the State Fiscal Stabilization Fund are directed for EFA funding. This will result in a base student cost of $2,342 with teacher salaries held at the Fiscal Year 2008-09 average. School buses, parts, fuel, and other school transportation items were funded at $17,500,000. The Child Development Education Pilot Program was extended for another year. The EIA was reduced by $34,000,000 to comply with the revenue estimate.
HIGHER EDUCATION: The LIFE, HOPE, and Palmetto Fellows Scholarship programs were funded. Higher education institutions received funds through the A.R.R.A. These funds were allocated to the institutions in proportion to their reductions and according to the state funding formula.
HEALTH: Health agencies were funded using state funds freed up within the Department of Health and Human Services due to the increased match rate provided by the A.R.R.A. The Department was also directed to transfer $235 million in state dollars to the General Fund. Various programs which had been reduced due to budget reductions in the current year necessary to receive A.R.R.A. funds were restored. Items funded include: Medicaid Maintenance of Effort, the Institute for Mental Disease Transition, Rural Hospital Grants, the AIDS Drug Assistance Program, and the Pervasive Developmental Disorder Waiver.
ECONOMIC DEVELOPMENT AND TOURISM: A proviso has been included to allow the Department to transfer available funds in other areas to the Deal Closing Fund to allow for its operation through the next year. Because more than 50 percent of agencies have been cut, the revenues normally designated for the Conservation Land Bank have reverted back to the General Fund.
CORRECTIONS AND LAW ENFORCEMENT: The Department of Corrections received $45,600,000 to restore their base budget to levels that would allow them to avoid declaring an operating deficit. This was partially restored with A.R.R.A funds.
The Department of Juvenile Justice received $7,600,000 to restore their base budget to levels that would allow them to avoid declaring an operating deficit from A.R.R.A. funds.
If you have a comment or opinion concerning the matters discussed in this report, or if I may be of assistance call me in Columbia (803-734-3071); my office in Clover (803-222-3701); or write P.O. Box 31, Clover, SC 29710. For more information, visit www.scstatehouse.net.