Representative Harvin reports on this week’s Statehouse activity
Budget week is a very difficult time for legislators. It is a time when it becomes agonizingly clear that we are a body of drastically different viewpoints on where we should be focusing our time and energy.
It is a time when I am grateful that the structure of our government provides for two legislative bodies that each go through the budget process providing a check and balance. I am optimistic that the Senate, who will take up the budget the last week of March, may add an element of levity to the work done by the House.
The House of Representatives amended, approved, and sent to the Senate H.4657, the General Appropriations Bill for fiscal year 2010-2011. The Board of Economic Advisors has provided a fiscal year 2010-2011 revenue forecast of $5,621,810,481. Following the subtraction of $545.8 million for the Property Tax Relief Trust Fund, revenues available for appropriation are $5,075,930,269.
Current base allocations are $5,275,343,200, necessitating a budget reduction of $199.4 million. Numerous funding obligations also exist such as: $98.2 million for the loan from the deposit account for the fiscal year 2008-2009 shortfall; $55.4 million to replenish the General Reserve Fund; $23.1 million for debt service; $99.7 million for the Homestead Exemption shortfall; $49.9 million for the State Employee Health Plan; $364 million for Medicaid Maintenance of Effort; and $50 million to avoid a deficit at the Department of Corrections.
To offset some reductions, the proposed budget incorporates $346 million in federal stimulus funds available under the American Recovery and Reinvestment Act, $239.3 million in federal enhanced Medicaid match rates, and $195.5 million from the Medicaid Maintenance of Effort Fund. Following the use of federal dollars and other nonrecurring revenues, agency cuts to recurring allocations amount to $337.5 million. The new base allocation has been reduced to $5,068,031,567.
The legislation does, however, include provisions that allow for the expenditure of additional federal funds that would become available upon passage of federal legislation extending the enhanced Medicaid Federal Medical Assistance Percentage (FMAP) that states have been receiving for two additional quarters. The anticipated federal funds available under the continuation of the enhanced federal Medicaid match are allocated to avoid proposed cost-saving measures such as the imposition of a three-prescription limit under Medicaid coverage and the elimination of the program that assists AIDS patients in obtaining medication they are unable to afford and funds to provide for the Temporary Assistance to Needy Families services no longer funded with federal dollars.
The legislation increases the cigarette tax collected to an additional 30 cents a pack. Revenue generated by the increase is deposited in a newly-created Medicaid Reserve Fund. Each year, 0.05 of a cent of the surtax on each cigarette must be transferred to the Department of Agriculture to be used for agricultural natural disaster relief and for the marketing and branding of South Carolina grown produce for retail customers.
Five million dollars in Department of Revenue collections enforcement funds is appropriated to reinstate the Deal Closing Fund that the Department of Commerce utilizes to attract business investment in the state.
The legislation authorizes a possible loan of up to $10 million from the state’s insurance reserve fund for the Heritage Golf Tournament in Beaufort County.
