Proposed S.C. budget largest ever; but programs still facing cuts

Posted: 03.02.2011 at 6:07 PM

Updated: 03.04.2011 at 11:45 AM

State lawmakers are set to begin debate on a record $22 billion budget. While state revenues are down an increase in federal spending is more than making up the difference. / File Photo

COLUMBIA (WACH) -- In less than two weeks, the House begins debate on next year's state budget. Lawmakers are proposing $22 billion in total state spending; that would be more than $1 billion over this year and the largest budget in state history.

This reality contrasts sharply with talk of spending cuts and shortfalls portrayed by most lawmakers and other media outlets, who only report on the state's roughly $5 billion general fund while excluding the majority of state spending.

So if the state plans to spend more money, what's with all of the talk about cuts and lack of money?

The bottom line the state budget is comprised of two main components: state funds and federal funds. Between the two categories there is a world of difference.

State tax collections are down sharply from $14 billion three years ago to about $12.5 billion now. As these dollars fund most state services, lawmakers are left with fewer dollars and have difficult choices to make about where to cut spending. But some state programs -- such as highway paving and Medicaid -- are largely funded by the federal government.

These programs are getting more money than ever before, with federal spending proposed to increase from around $6.5 billion three years ago to more than $9 billion.

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This means that while the state is collecting less money from South Carolina taxpayers, the federal government is more than making up the difference. However, those federal dollars are often obligated to specific programs. That is why even though total state spending is going up, lawmakers still must cut spending in other areas.

Federal funds already make up the largest single category of state spending. If the trend continues at current levels, in less than five years the federal government will provide more than half of total state spending.

Read the full proposed 2011-2012 budget on the House Ways and Means Committee's website.

So what do you think about all this? Does it concern you that state lawmakers may be forced to cut spending on education and other state services while programs funded largely by federal dollars continue to grow? How would you address the situation? As always, we want to hear from you.