South Carolina state agencies bracing for bad spending news
By JIM DAVENPORT Associated Press Writer

COLUMBIA - Health care for poor children and namebrand drugs for some sick people could wind up on the budget-cutting floor in the coming weeks if South Carolina lawmakers face forecasts that show tax collections aren't keeping up with spending demands.

Gov. Mark Sanford already has called for cutting $326 million, or 4.6 percent, from the current $7 billion budget. His proposals include taking $22 million from a health insurance program legislators ordered expanded last year to cover 70,000 additional children. Sanford also wants the state to save $16 million by moving more Medicaid users to generic drugs.

House budget writers, who are to get new revenue estimates on Monday, already have asked agencies how they would deal with budget cuts. For instance, last week, Rep. Annette Young, R-Summerville, asked the law enforcement and criminal justice agencies she oversees how they'd deal with less money.

''There is nothing to cut,'' said Josh Gelinas, spokesman for the state Corrections Department.

The agency's $336 million budget leaves it ranked among the nation's leanest in spending on inmates, staff, health care, food, clothing and security. ''Before we cut our spending, we would ask to run a deficit and continue operating the system as it is, just as we did in 2002, 2003 and 2004. There really is no alternative.''

Gelinas said the prison system has cut travel, raises its own eggs and cut health care spending reductions, including treating some inmates with mental disorders through teleconferencing rather than at psychiatric hospitals.

Belt-tightening appears inevitable, and critics are firing away at the budget the Republican governor proposed.

''For the governor to go after children's' health care again is just unconscionable,'' said Sue Berkowitz, director of South Carolina Appleseed Legal Justice. ''We always take that seriously, although we don't see support for that'' among legislators.

Education Department spokesman Jim Foster said that, so far, there's been little talk of cutting public school budgets. But Scott Price, a lobbyist for the South Carolina School Board Association, said there are worries that cuts could derail plans to expand statewide a pilot program that now offers kindergarten to 4-year-olds in nine school districts.

''I would hope they would at least be able to keep the pilot program in place,'' Price said.

The governor's office defends its health care proposals as needed to sustain Medicaid. Sanford spokesman Joel Sawyer points out that South Carolina is near the top in the nation when it comes to the percentage of children who receive subsidized care, although the state also has among the lowest personal income levels.

The calls for cuts play out as Sanford continues to argue that state economic projections are not gloomy enough.

On Monday, the state Board of Economic Advisors is to release a state revenue estimate that will clear the way for the House Ways and Means Committee to finish writing its budget. Unless sales tax collections fell sharply in January, the board says its current estimate of about 3 percent revenue growth over the fiscal year should stand. But that's so low legislators need to trim spending.

Sanford believes things will be even worse. Twice in the past two weeks he has tried to convince Bill Gillespie, the state's chief economist, to lower expectations. On Thursday, he sent Gillespie a letter saying the Federal Reserve's latest interest rate moves demonstrate ''the federal government is acting contrary to your belief that suggests that we're at the bottom of this year's revenue cycle.''

House Ways and Means Committee Chairman Dan Cooper, R-Piedmont, is comfortable with the board's projections. Since July, the estimate has been off only by about $10 million and ''that's way less than 1 percent off,'' Cooper said.