If you thought the last couple of budget years were bad, wait until you see the wrangling over money and policy in the coming session of the General Assembly.

The big reason is the state's big-ticket needs for millions of dollars in rising Medicare costs, school improvements, prisons and lots of other areas that won't be paid for simply with economic growth. Indicators show the state's economy starting to perk up, but the heady days of growth of the late 1990s aren't yet on the horizon.

"It's not growing fast enough to get through this next budget year," said House Majority Leader Rick Quinn, R-Columbia.

Because the state isn't going to grow out of its problems, it will have to look to other opportunities.

In the coming year, it's a good bet the state won't get a last-minute infusion of hundreds of millions of dollars as it did earlier this year, which allowed lawmakers to pay for Medicare increases and bypass some decisions.

In an election year and with a Republican legislature, politicians aren't likely to raise new money with new taxes.

So for lawmakers to wiggle out of another tight budget year, they're going to be faced with even more tough decisions to cut, reshape or reform programs and services to generate enough money to pay for the state's needs.

The coming session's major legislative battles will come in two linked areas: dealing with the budget and how government should be restructured, which could create savings and make it easier to deal with the budget.

At the heart of the budget debate will be a focus on how the state should be taxing its citizenry.

Look for bloodletting in the House and Senate as leaders compete to woo support for their pet plans. There are plans to increase sales taxes to cut property taxes. Another calls for income tax cuts fueled by cigarette tax increases. Still others include cutting some sales tax exemptions to help boost state coffers.

Regardless of the outcome, the way South Carolinians are taxed likely will be reshaped this legislative session.

"Something involving the tax code will probably happen -- probably something involving the property tax," said state Rep. Jim Merrill, R-Daniel Island.

Affecting budget decisions is the restructuring agenda being pushed by Gov. Mark Sanford. More than likely, restructuring will go far beyond making some constitutional officers, such as agriculture commissioner and secretary of state, gubernatorial appointments rather than elective offices.

Restructuring of state agencies, practices and programs to reduce duplication of services, create efficiencies and consolidate programs could generate enormous savings, proponents say.

And while restructuring is a hot topic, others observe that the state has gone through several years of budget cuts, including a handful of painful mid-year cuts. They say there's not a whole lot of fat left, which means there may not be a lot of low-hanging fruit for restructuring without significant pain.

Other key issues for the coming session:

Medicare changes. Republicans and Democrats seem to agree in general that they'll have to take measures to counteract the huge projected increases in costs.

Tort reform. Business groups are pushing feverishly to change the rules on lawsuits and damages. While some reforms, such as changes to rules to make it harder for lawyers to "shop" for friendly jurisdictions, may pass, look for a showdown between the business and medical community and the legal community over sweeping changes.

Higher education. It looks like the General Assembly will consider ways for colleges and universities to borrow to build infrastructure for research, which can help attract jobs over the long term. There also may be a move to reshape the way government oversees higher education, such as an idea floated by Sanford to allow some public institutions to become private.

The bottom line for the coming legislative year is that it's going to be another tight budget year, and that will drive everything else.

But compared with the previous two years, the battles will be bigger and bloodier over the way the state does business and provides services.