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Gov. Sanford: Budget Risks Health of Medicaid, State's Finances


web posted February 27, 2008
COLUMBIA – Governor Mark Sanford visited hospitals in Greenville and Charleston Tuesday, calling on the House to rework the Ways and Means Committee's proposed budget, so that it doesn't take from reserve funds and impact the state's ability to provide Medicaid for its neediest citizens.

Under the Committee's proposal that was passed last week, more than $100 million would be taken from a fund set aside for Medicaid reserves in the case of an increase in Medicaid population, and to transition to new Medicaid reforms. The Committee's proposal would seriously deplete this fund.

This year, state revenue growth is essentially flat, and the state is dealing with a $270 million budget hole created by the fact that last year, budget writers paid for ongoing expenses with one-time money. The Committee's proposed budget continues this practice to the tune of $179 million in one-time money to pay for ongoing expenses, meaning that next year the state will face even more painful cuts.

"The bottom line is that this budget needs a lot of work if the House is serious about protecting both the people served by government and protecting taxpayers from the effects of poor budgeting," Gov. Sanford said. "After the last recession, the lesson should have been learned about taking money from trust funds and digging annualization holes. It's very disappointing that history is about to repeat itself, and has the very real potential to impact 860,000 people served by Medicaid in the process."

Other elements of the Ways and Means budget include:
- The House taking credit for funding an expansion of health insurance for low income children by $22 million, but failing to mention that at the same time more than $100 million was being taken from the program.

- Taking $2 million from a Department of Commerce economic development fund to repay a loan made last year from the state's Energy Office. The governor had asked instead that the money come from a pet projects fund - the Competitive Grants program - which the Committee left untouched with over $18 million.

- Cutting $8 million from the Department of Corrections, when the South Carolina prison system is already spending less per inmate than any other system in the country.

- Giving state employees a 1 percent raise, yet giving a number of agency heads an average 4.2 percent raise.
 




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