SC legislators want to make budget cuts automatic

AP News
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Posted: Jan 04, 2010 1:41 PM

To deal with future budget shortages, the state's top legislators want across-the-board cuts to come quicker as they propose automatic cuts when revenues fall a certain percentage.

Currently, only a budget oversight board led by Gov. Mark Sanford can decide to cut the state's spending when it gets a report that revenues are 4 percent shy of expectations. Lawmakers want the cuts to come automatically when the state's revenues are 2 percent short.

"What I'm after is year-end deficits," said Senate Finance Committee Chairman Hugh Leatherman, R-Florence.

Leatherman, Senate President Pro Tem Glenn McConnell, House Speaker Bobby Harrell, and House Ways and Means Committee Chairman Dan Cooper are jointly proposing changes that include automatic cuts, larger reserve accounts and studying whether some programs or agencies need to be eliminated.

Last month, the Budge and Control Board Sanford chairs slashed 5 percent from budgets on top of a 4 percent reduction in September.

Schools, health care, police and other state agencies have been hit hard as a lingering recession and soaring unemployment clipped state tax collections. South Carolina's 12.3 jobless rate in November tied California and Nevada as the nation's third-highest.

In the past, Sanford has voted against across-the-board budget cuts, but his spokesman Ben Fox said Monday the governor thinks the budget changes are worth considering.

Legislators also want to increase reserve accounts to placate Wall Street bond rating agencies leery of the state running out of money. The state has scrambled to do that for the past three years by raiding reserve accounts as tax revenues have fallen below $6 billion.

"Tripe-A states don't run deficits," Leatherman said.

Legislators want the state's primary reserve account to grow to 5 percent of state revenues, up from the current 3 percent.

And they want a second reserve account of 2 percent of state revenues to be used after state agencies have gone through across-the-board cuts. Under current law, that account is used before agencies are told to trim spending.

Apart from reserves and budget cuts, other states have turned to tax increases to head off shortfalls. But that's not likely in South Carolina.

"The majority of us are not going to vote for tax increases," McConnell said. "There is no spigot of revenue on the horizon."