Posted on Wed, Apr. 14, 2004


Senate Finance cuts House spending plan by $107 million


Associated Press

The Senate Finance Committee trimmed $107 million from the House's $5.3 billion state spending plan Wednesday, touching off a scramble to find ways to cut agency spending.

That $107 million amounts to about 2 percent of all state agency spending. Agencies already are reeling from three years of budget reductions and midyear cuts as revenues consistently fell short of expectations after the recession.

New worry about potential cuts emerged as the Senate Finance Committee ditched or curtailed plans pushed by Gov. Mark Sanford and the House to raise money from a variety of new sources.

A Sanford-backed proposal to generate $25 million by selling part of the state's automobile fleet died. "We don't believe that that's the right thing to do, a feasible thing to do," Senate Finance Committee Chairman Hugh Leatherman, R-Florence, said.

The governor's plan to generate $32 million by selling off surplus state property, including a huge Mental Health Department tract in Columbia, was scaled back to $15 million. "I don't believe you can sell that much land in the middle of ... downtown Columbia in one year's time and get the best return," Leatherman said.

Subcommittees spent much of the afternoon trying to figure out where to cut.

The education committee came up mostly empty after more than two hours of combing through a $1.9 billion budget, said Sen. Harvey Peeler, R-Gaffney and the panel's chairman. The subcommittee has an eye on the state's lottery to fix the problem, he said.

"The lottery's the only bright spot in this entire budget," Peeler said. It's expected to generate an extra $100 million that only can be used on education programs, Peeler said.

But the lottery law says that the money can be used only to supplement, not replace, regular state education spending.

It doesn't make sense, "to have a hole in one pocket and $100 million in the other and say 'Well, I can't sew that hole up,'" Peeler said. The budget committee should pay for scholarships out of the lottery money first, but after that "everything is fair game," including state spending on college research programs and plans to buy new school buses, Peeler said.

The subcommittees could have faced a bigger problem, but the Senate Finance Committee agreed to include $90 million in the budget tied to increased tax collections. State Revenue Department Director Burnet Maybank convinced the House two months ago that he could generate that much money if budget writers gave him $9 million to hire auditors and tax collectors.

Skeptics called it "may bank," meaning that it's money that may or may not reach the state's coffers. Leatherman has said that money is too iffy to include in the state budget.

Maybank told the Senate Finance Committee on Wednesday that the Board of Economic Advisors "vigorously do not certify" that he'll collect that much money. That board's chairman called the plan "foolishness," Maybank said.

Foolishness or not, Maybank convinced the Finance Committee to go along with his plan. He told them collectors can be expected to recover about $2 million each.

"I say go get 'em," Sen. John Drummond, D-Ninety Six, said.

"My concerns, for the time being, have been dealt with," Sen. David Thomas, R-Fountain Inn, said.





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