SC Gov-elect Haley taps panel for $1B budget fix

By JIM DAVENPORT

COLUMBIA, S.C.

South Carolina Gov.-elect Nikki Haley set up a fiscal crisis task force on Monday to come up with ideas to deal with a looming state budget crisis that could top $1 billion.

Haley said she's worked since the election to get a handle on the state's problems.

"And part of that understanding that we are going into what is going to be the worst budget year that the state has seen," Haley said. "We have to make sure that we are in front of the crisis as opposed to being behind it."

Estimates show the state's $5 billion budget is facing a $1 billion hole in July and already short more than $270 million for the current fiscal year.

For the group, Haley tapped George Schroeder, the former director of the state's Legislative Audit Council; U.S. Rep. Henry Brown, a Republican leaving office in January and who was a former state House budget committee chairman and Ashley Landess, chief executive of the conservative South Carolina Policy Council. State Rep. Nathan Ballentine of Irmo and state Sen. Tom Davis of Beaufort are also on the group. The task force is expected to come up with ideas before Haley takes office in January.

Schroeder, who ran the council for 33 years, said he probably had identified $1 billion in waste and fraud in his career and the group should be able to draw on the expertise needed to find savings.

"I think we have a reasonable opportunity for success," Schroeder said.

"No one has ever said this isn't going to hurt. I think we have to be realistic with the people of South Carolina that this is going to hurt," Haley said.

Haley said the group would start meeting immediately and decide what government has a responsibility to provide to citizens.

Meanwhile, Gov. Mark Sanford has agreed to freeze promotions and hiring at his Cabinet agencies.

"And I greatly challenge other agencies in state government to do the same thing until we identify what all of these problems are and identify how we are going forward," Haley said.

State agencies are carrying thousands of open positions and have curtailed workweeks for state employees for more than a year as the state's budget shrank from nearly $7 billion three years ago as the recession loomed.

Haley also set up an Internet site, http://www.scbudgetcrisis.org, for citizens and state workers to report fraud and waste. The state has run similar operations for years, including a fraud prevention hot line at the state's financial oversight board.

The state Department of Health and Human Services said last week that it would have to shut off payments to doctors taking Medicaid for the state's elderly, disabled and poor unless the state approves plans for it to run a $228 million deficit in the current fiscal year.

Haley isn't ready to say what's needed there as demand for Medicaid coverage for the poor has grown in the recession and will grow more with federal health care law changes.