State employees will pay more for health insurance starting Jan. 1, but state officials have plans to stop five years of increases in 2006.

Gov. Mark Sanford said Monday that his proposed state budget for 2005-06 would add $23 million to the state health plan — enough to prevent any premium increases in 2006.

House leaders are working on a similar plan, said Rep. Bobby Harrell, R-Charleston, chairman of the Ways and Means Committee, which writes the state budget.

Harrell and Sanford agree the 350,000 members of the state health plan deserve some good news after five years of premium increases and benefit cuts.

“It’s past time that your government prioritized spending and stopped passing this cost on to you,” Sanford said in a news release.

Harrell called it “great news for state employees.”

Efforts to reach Senate Finance Committee chairman Hugh Leatherman, R-Florence, and leaders of the S.C. State Employees Association were unsuccessful Monday.

Rep. Dan Cooper, R-Anderson, chairman of the House subcommittee that oversees the budget for the state health plan, said he has “been tinkering” with the plan for the past three years to try to halt premium increases.

At a meeting last week, the Ways and Means Committee discussed adding money to the plan to end the increases, Harrell and Cooper said.

Sanford, who faces re-election in 2006, went a step further Monday. His budget proposal, which will be released early in January, will put an estimated $45 million back into the health plan’s reserve fund, on top of the $23 million to cover premium increases.

Sanford said the reserve fund had $164 million in 1996 but much of that has been spent by state government on other needs. By state law, the fund is supposed to have enough money to cover 45 days of average insurance claims.

The fund has not had that reserve in nearly four years, Sanford said, as its cash reserves were “raided to the point that they no longer existed.”

The $45 million would come from the so-called “Maybank Money,” named for Department of Revenue chief Burnie Maybank.

Last year, Maybank challenged the governor and lawmakers to give his agency an additional $9 million to hire auditors and collectors. In return, he predicted those new employees would bring in $90 million in new state revenue. Maybank got his money.

While some officials say Maybank is going to make good on his promise of $90 million, the state’s Board of Economic Advisors does not include all $90 million in its revenue projections.

Sanford said he believes $45 million is a conservative estimate of the amount the new state auditors and collectors will bring in. If more money is delivered, it also will go to the reserve fund, Sanford press secretary Will Folks said.

But Sanford can only propose the shift in resources, not require it. He is required by law to produce an executive budget proposal, but lawmakers are not bound to follow his plan.

Typically, the governor’s budget is used as a guide or starting point, but legislators and the governor often disagree on many budget proposals.

Reach Gould Sheinin at (803) 771-8658 or asheinin@thestate.com