The Associated Press May 16, 2011, 3:30PM ET

SC Senate wrapping up work on $6 billion budget

The $6 billion South Carolina state spending plan legislators expect to finish this week will cut social safety net programs but saves more teaching jobs than once expected and also offers businesses a $100 million tax break.

The final chapter in budget writing comes as the economy recovers and frees up cash from reserves and increased tax collections. Three years ago, budget writers approved a budget topping $7 billion but the recession carved $2 billion from general taxpayer spending.

Still, the proposed budget will lock in an array of benefit reductions for people on Medicaid and welfare programs that were put in place earlier this year to head off deficits at the Department of Health and Human Services and Department of Social Services.

-- In February the state Department of Social Services cut welfare-to-work payments for an average mother of two from $270 monthly to $216. People getting the checks must work at least part time or be in a training program to qualify for payments that already were among the nation's lowest.

-- The Department of Health and Human Services earlier this year eliminated or reduced a variety of Medicaid services, including adult dental and vision services, the number of shoes diabetics can receive and home health care visits.

There are new spending cuts, too. The proposed budget calls for cutting $125 million from reimbursements to doctors and hospitals. And it now requires all Medicaid patients to use generic drugs if they are available and don't cause bad reactions.

With the state's economy improving, spending cuts aren't as harsh as once expected in public schools as legislators tapped a variety of reserve funds to shore up the state's K-12 budgets.

The state will spend $9.5 million less in general taxpayer funds on public schools. That's after budget writers cut $19 million from a national teacher certification program and nearly $4 million from physical education programs. But they also added $25 million in general taxpayer funds for public charter schools.

But legislators also turned to surpluses and reserves to pay for school operations. That included $97 million to cover per-student classroom spending and $20 million to help wealthier school district avoid losing money under state's school funding formula.

"We probably have come out much better than anybody had anticipated," said Scott Price, chief lobbyist for the South Carolina School Boards Association. Money is still tight at schools and furloughs and layoffs remain likely, he said. And that comes after two years of teaching staff cuts that cost 3,676 teaching jobs,

Meanwhile, South Carolina's public colleges are again some of the budget's biggest losers. Most will have 6 percent reduction in their general taxpayer budget. That includes more than $6 million at the University of South Carolina, nearly $4 million at Clemson University and $3.2 million at the Medical University of South Carolina.

But budget writers kept colleges from seeing overall spending reductions by using reserve cash to pay for overdue maintenance projects at the schools: including more than $9 million at USC, $6 million at Clemson and nearly $5 million at MUSC.

When legislators take up the budget debate Tuesday, they're expected to first discuss South Carolina Education Television, which lost its general fund budget as lawmakers mostly went along with a request from Gov. Nikki Haley.

To make up for the $9.6 million funding loss, budget writers instead socked away money in other agency budgets that will cover ETV operations, including nearly $5 million from the public schools budget, and lets ETV collect $3 million from broadband leases.

The budget news has been good lately. Last week, the state revenue forecasting board added $210 million to the total revenues legislators would be able to spend.

That more than covered the $100 million the Senate has approved to reduce unemployment tax bills for employers who have records of laying off or firing workers.


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