Budget Solution Steers Clear of Tax Increase
Works to Minimize Impact Felt by General Public
Columbia, SC – The South Carolina Senate Finance Committee met today to begin the process of reducing the 2008-09 state budget by almost $620 million. The 9.5 percent proposed reductions go beyond the $550 million necessary to bring the budget in balance; however, lawmakers hope that by taking a strong approach now, additional reductions will not be necessary. The current proposal avoids the possibility of raising taxes and maintains the funding priorities established during the original budget process with minimal impact to K-12 education and healthcare.
People need not worry about the General Assembly raising taxes,² says Senate Finance Chairman Hugh Leatherman (R-Florence). ³Our primary mission was to build a plan that maintains essential services, refocuses our spending priorities and allows us to live within our means, just as families all across South Carolina are doing. We also need to remember the reductions being proposed follow three years of tax cuts, which have returned over $1 billion annually to South Carolina taxpayers.²
As lawmakers have looked for ways to ease the impact of budget reductions on state agencies they have proposed using $8 million from the Competitive Grants program and another $10 million from the Endowed Chairs program to minimize the total amount of necessary reductions. Lawmakers are also discussing giving state agencies the flexibility to manage other available funds under an agency¹s purview to lessen the impact of the proposed reductions.
Lawmakers are also looking for additional funds to ensure that school districts have the money necessary to fuel school buses. One proposal being considered is redirecting $10 million from a Department of Motor Vehicles to use for school bus fuel.
The budget reduction plan that will first be debated by the House was developed through a joint effort with input by state agencies via the Governor¹s office. Some agencies submitted recommendations for budget reductions up to 10 percent. The proposal discussed in today¹s Senate Finance Committee meeting took those submissions into consideration and resulted in some specific targeted cuts.
In September the Budget and Control Board made a 3 percent across-the-board cut, which is included in the proposed budget reductions. The average reduction to most agency budgets will be around 13 percent, but K-12 education and health care will see much smaller reductions. The Department of Corrections will receive funds taken from the Competitive Grants program to help ease an already tight budget.
³We have done everything possible to safeguard the core functions of state government,² says Senator Leatherman. ³Reductions for state agencies will require equal sacrifices to be made, but not necessarily equal cuts; however, that does not mean that any of the reductions will be easy.²
The budget reductions being proposed are only for General Fund revenue appropriated by the General Assembly. Funding from federal sources or other revenues streams are not part of the proposed reductions, so while some agencies may see a reduction in their General Fund appropriations the real impact to an organizations overall budget may be much smaller.
³The people sent us to the State House to make tough decisions and now it is time to make tough decisions,² says Senate Majority Leader Harvey Peeler (R-Cherokee). The General Assembly is scheduled to convene Monday, October 20, to begin deliberations on the proposed General Fund reductions.
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