Watching this year’s budget-cutting process is like watching an episode of Biggest Loser in that whoever is the leanest isn’t always the healthiest.

After mid-decade binges in state spending, state government has been on a three-year purge, with even tighter belts coming next year.

Currently, the House version of the state’s General Fund budget is sitting in the Senate.
The $5.1 billion budget is the smallest in years, taking spending levels back nearly a decade. But hey, who doesn’t want to be as thin as they were 10 years ago?

Complicating matters are a $60 million accounting snafu and a $67 million “mis-spending” on Medicaid, which means the Senate now has to craft a budget closer to the $5 billion mark.

And as it always is with money, there are going to be winners and losers. Or in this year’s budget process, losers and not-quite-as-big losers.

“We’ve already gone through horrendous, horrible cuts,” said Senate Finance Chairman Hugh Leatherman (R-Florence). “And now we have to deal with a $127 million difference so late in the day; I don’t how we’re going to do it.”

Leatherman said there was some “good news” about the budget his committee will present to the full Senate this week. “We’ve been bumping along the bottom so much for so long, we can’t go much lower.”

But he also said that funding for core state services is getting cut so close to the bone that soon the state might not be able to deliver core services it is required to provide.

Corrections Department Wins: Perhaps the biggest “winner” in the budget is the state Department of Corrections, which is already running a $29 million annual deficit.

The House budget funded Corrections at close to its current year spending and the Senate’s plan is within $7 million. But because the agency was allowed to continue its deficit this year, Corrections was arguably exempted from 4- and 5-percent mid-year cuts all the other state agencies were hit with.

While talks of layoffs and furloughs pepper state job water coolers, there is no hiring freeze at Corrections, where jobs listings are in plain view on the agency’s website.

Highway Patrol Wins: Another “winner” might be the state Highway Patrol, which had been looking at a reduction of more than 250 officers over the next year or so. That is a significant number because the entire department is only close to 900-strong.

Before a Senate Finance Committee move restored a big chunk, funding was so scarce that there might not have been jobs for the 46 candidates expected to graduate from highway patrol school this year, according to Finance staffers.

Education Crippled: Easily, the biggest loser in the budget to be debated next week will be education. Cuts to K-12 education take state funding levels back 16 years to 1994. But that pales in comparison to the hit Higher Ed is about to take.

The current Senate plan is to remove an additional $104 million from college base budgets in recurring cuts. Finance research showed that not only would that represent a 44 percent cut to higher education over the past two years, but it would drop state funding levels to those from 1985. Yes, 1985.

Here’s the kicker: the reduced amount is not adjusted for inflation or increased student populations, which is crucial since the state has, according to Finance, increased its student population by the equivalent of four Clemsons. Yes, four Clemsons.

As draconian as the higher ed cuts might seem, Julie Carullo, director of government affairs at the state Commission of Higher Education, said they were in line with the House cuts. Carullo also said that like K-12, most institutions’ money was tied up on the personnel side of the ledger for salaries.

“Colleges and other institutions will all be working hard in response to this to find more efficiencies, but it’s hard to imagine that with having lost 44 percent in baseline funding since 2008 that there won’t be consequences.”

Ongoing Pain: The bad news won’t stop coming for any corner of state government, at least for a while. Even though the state and national economies seem to be improving, Leatherman doubts they will rebound quickly enough to stave off any of the current budget drops.

That’s especially bad news for state Medicaid, which expanded its eligibility roles to get federal stimulus money, which stops at the end of next summer.

Crystal ball: There are three options for state government. First, keep cutting despite the risk that more cuts could mean agencies won’t be doing the jobs they are required by law to do. Second, raise fines and fees so that anyone needing something outside of core services will be expected to kick in more money. And third, raise taxes. When asked about the likelihood of raising taxes next year, Leatherman was cryptic. “That’s up to the General Assembly,” said Leatherman, a bit of a bigwig in that body.

Bill Davis is the editor of SC Statehouse Report; he can be reached at editor@statehousereport.com. Let us know what you think: Email news@free-times.com.