(Columbia) Aug. 20, 2003 - State agencies have been told to spend $43 million less this year. The Budget and Control Board also tapped a reserve fund to head off budget shortfalls this year and cover a deficit left over from the fiscal year that ended in June.

Agencies must set aside the money, which works out to one percent of their budgets because of a projected $108 million drop in the state's revenue projections. But they may get to spend it later if the state's economy and tax collections improve. The state has suffered five other midyear cuts since May 2001. 

The moves are also designed to cover a $22 million deficit from the fiscal year that ended June 30th.

The agencies taking the largest cuts:

Education Department, $17.6 million Health and Human Services Department, $5.6 million Corrections Department, $2.6 million Mental Health Department, $1.7 million University of South Carolina in Columbia, $1.5 million Technical colleges, $1.4 million Disabilities and Special Needs, $1.4 million Department of Health and Environmental Control, $1.1 million Department of Public Safety, $902,036 Department of Social Services, $888,398

Governor Mark Sanford and Comptroller General Richard Eckstrom were on the losing side of the vote on what to do about a $155 million deficit from the previous year. Sanford and Eckstrom have said they want immediate budget cuts to cover the deficits from the 2002 fiscal year and $22 million in deficits from the fiscal year that ended June 30th.

Those deficits remain after the state emptied $40 million in rainy day accounts by the end of the fiscal year that ended June 30th. The state is using money for this year's $5.1 billion budget to make up for last year's shortfall, just as it did the year before.

State Treasurer Grady Patterson, Senate Finance Committee Chairman Hugh Leatherman of Florence and Ways and Means Chairman Bobby Harrell of Charleston say the board has no authority to deal with the previous year's deficit.

Eckstrom says the deficits violate the state Constitution's budget standards.

Students at the Department of Juvenile Justice were crunching some numbers in the classroom Wednesday afternoon. Math is just one of the courses the teens take through the Communities in Schools program. It's designed to help young offenders prepare for life in the real world.

DJJ Director Judge Bill Byars says the world is full of economic problems, "I'm funded for 190 days, my kids go to school 235 days a year, so we are the poorest school district in the state."
    
Governor Sanford says agencies should consider the money gone, especially given the state of the national economy, "Particularly exacerbated in South Carolina given the long turn downward in textiles over the last ten years and give the slowdown particularly in manufacturing. South Carolina has a higher percentage of manufacturing than most states."

Byars is looking for ways to cutback without cutting out important rehabilitative programs, "It'll be tough because we've lost a lot of money over the last two years. We've already gone through a reorganization. It'll mean going back and seeing what we can tighten up."

One way DJJ hopes to save money is voluntary retirements, along with holding the one percent from state agency budgets.

Sanford's office and Eckstrom, both Republicans, both blame former Governor Jim Hodges for the deficits. Hodges, a Democrat, says the deficit has nothing to do with poor stewardship and has everything to do with a weak economy. He says all but two states around the nation are in similar financial straits.

Reported by Rebecca Pepin
Updated 5:28pm by BrettWitt with AP