Posted on Fri, Feb. 14, 2003


Budget cuts may reach 21 percent, some say


Staff Writer

The top budget-writers in the General Assembly are split on how bad next year's state budget will be.

Senate Finance Committee Chairman Hugh Leatherman, R-Florence, said Thursday that cuts to state agencies could be as high as 21 percent.

But House Ways and Means Committee chairman Bobby Harrell, R-Charleston, said he doesn't believe the 2003-04 budget, which goes into effect July 1, will be that bad.

In response to lagging revenues, the state's $5.2 billion 2002-03 budget has been trimmed twice already this year, by a total of more than $416 million. Some projections for 2003-04 point to a funding shortfall of between $400 million and $900 million.

Leatherman said Thursday that without an increased cigarette tax, or other new revenue, to fund Medicaid, state agencies will be cut an average of 21 percent over current funding levels.

There are several proposals in the Legislature to raise the current 7-cent-per-pack cigarette tax by as much as 53 cents, bringing it closer to the national average of 60 cents.

If the cigarette tax passes, or some other source of money is found, those cuts drop to about 10 percent, he said on the S.C. ETV program "Stateline," which aired Thursday.

"I don't know how in the world we're going to deal with" cuts of 21 percent, Leatherman said later.

Leatherman would not say that he supports an increase in the cigarette tax to fund Medicaid, the health care system for the poor, disabled and elderly. But something has to be done, he said.

"I'm supporting and committed to fully funding Medicaid," Leatherman said. "The tobacco tax is the issue that's at the forefront now. Will there be other sources? I don't know."

Harrell said he doesn't believe cuts will be that deep. A clearer picture should emerge next week when his committee takes up the budget, Harrell said.

"There are cuts coming," he said. "They are going to be difficult to deal with."

But Harrell does not believe a cigarette tax increase is necessary.

"The issue isn't whether or not you have a tobacco tax itself," Harrell said. "The issue is how much do you want to increase the Medicaid budget."

Harrell believes growth in Medicaid spending can be curtailed in ways that maintain services and do not require tax increases.





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