REP. DAN COOPERC H A I R M A N , W A Y S & M E A N S C O M M I T T E E

T U E S D A Y M A Y 3 , 2 0 1 1

C O L U M B I A , S O U T H C A R O L I N A

The South Carolina State Budget

1 . BUDGET PRIMER

2 . LOOKING BACK

3 . THE HERE AND NOW

4 . WHAT’S NEXT

Outline

The NumbersK-12 and Medicaid =42% of the Budget

Total Expenditures

$19.8 Billion (FY 09/10)

Total Personal Income

$146 Billion (2008)

SC Budget is about 1/7 of our total state economy.

Public Education

$3.7B Total Funds

713,600 Students

$20.5M per day of school (180 days)

Medicaid

$5.14B Total Funds

952,004 Recipients

$100M per week

Budget Primer

Looking Back

High Point: 2006/07

$6.659 Billion

FY 2009/10

$5.309 Billion

Loss of $1.42 Billion just over 20%

FY 2008/09

Rescission Bill - $487.9M

7% B&CBd. - $383.5M

2% B&CBd. - $101.9M

FY 2009/10

4% B&CBd. - $200.5M

5% B&CBd. - $238.2M

Revenue Appropriation Adjustments

Historical General Fund Collections

$0

$1,000,000,000

$2,000,000,000

$3,000,000,000

$4,000,000,000

$5,000,000,000

$6,000,000,000

$7,000,000,000

197

919

80

198

119

82

198

319

84

198

519

86

198

719

88

198

919

90

199

119

92

199

319

94

199

519

96

199

719

98

199

92

00

02

00

12

00

22

00

32

00

42

00

52

00

62

00

72

00

82

00

92

010

20

112

012

Going back 30 years there was only one year of negative GF growth – at least until the last recession.

General Funds Total Funds

Education (K-12) $1,879,298,422 $3,567,576,153

Higher Education $568,870,814 $4,051,324,682

Health & Social Rehabilitation $1,206,725,193 $9,195,283,935

Correctional $402,621,026 $525,969,957

Public Safety $65,880,728 $176,691,119

Legislative $34,693,360 $36,470,108

All Other $922,309,352 $3,560,624,378

Total $5,080,398,895 $21,113,940,332

Current Budget

Allocations:

Fiscal Year 2010/11

In terms of Dollars

Allocations General Fund Allocations for FY 2010/11

Education (K-12)37%

Higher Education11%

Health and Social Rehabilitation

24%

Correctional8%

Public Safety1%

Legislative1%

All Other18%

Allocations Total Fund Allocations for FY 2010/11

Education (K-12)17%

Higher Education19%

Health and Social Rehabilitation

44%

Correctional2%

Public Safety1%

Legislative0%

All Other17%

FY 2011/2012

Is there cause for optimism?

What’s Next

FY 2011-2012

In March the House of Representatives closed an $840 million budget gap to pass a balanced budget that funds core government services, while not raising taxes.

The House was able to do this by doing two things:

1. Eliminating much of the annualization problem created by previous budgets, and

2. Maximizing the modest gains in the General Fund.

Annualziations

Annualization – while there are many definitions of an annualization; the most common is the paying for recurring items with non-recurring dollars.

i.e. -- Get a one time bonus at work and go buy a car.

The $840 million shortfall makes the assumption that all one-time or non-recurring items will be annualized.

However, the Budget passed by the House does not annualize most of these items.

Annualizations cont.

The current annualization problem is mostly the result of the Stimulus Package.

Approximately $345 million went to state agencies in ARRA funds.

Then about another $400-$500 million in annualizations with Medicaid when the enhanced match rate reverts back to normal levels.

House Budget

Annualized:

$100 Million of EFA funds at SDE

$35 Million at Dept of Disabilities and Special Needs

$40 million at the Department of Corrections

All necessary Medicaid Dollars

Not Annualized:

$110 million spread across institutions of Higher Learning

≈$5 Million to Natural Resource agencies

$74 million at SDE

General Fund

The State’s economy and the General Fund are currently showing signs of recovery.

We had bottomed out for quite a few months, and for the first time we are seeing, small growth; but growth none-the-less.

Current Year-to-Date over last year:

Retail Sales and Use Tax –Up 2.2% or $31.1 million

Individual Income – Up 7.6% or $148M

Economic Indicator

Economic Indicators cont.

Economic Indicators cont.

House Version FY 2011/12

Key Points:

Added $100 million to the EFA to increase the Base Student Cost from its current level of $1,617 per student to $1,788 per student.

Fully funded the Medicaid program per the request of Governor Haley and Director Keck ($437 million additional funds) .

Reduced the size of Government by elimininting 4,700 unfilled and unfunded FTEs.

Restructured the funding model for ETV to allow the agency to operate on a more market-based funding model.

House Version FY 2011/12 cont.

Fully funded the proposed merger of the Dept of Corrections and the Department of Probation, Parole, and Pardon Services.

Reductions in Higher Education were targeted to reward institutions with higher graduation rates and favorable in-state enrollment.

Allocated $110 million from the FY 2010/11 Capital Reserve Fund. Some items include:

$10 million for the Closing Fund at Commerce

$13 million for the Special Schools program at the Tech Board

$5.5 million for tourism promotion

Rep. Dan Cooper

Ways & Means

Committee

Questions