REP. DAN COOPERCHAIRMAN, WAYS & MEANS COMMITTEE

RURAL HOSPITALS MEETING

MONDAY DECEMBER 6, 2010

COLUMBIA, SOUTH CAROLINA

The South Carolina State Budget: Limited Options,

Fewer Solutions

1. CURRENT BUDGET ALLOCATIONS

2. POSSIBLE SOLUTIONS

Outline

Allocations General Fund Allocations for FY 2010/11

Allocations Total Fund Allocations for FY 2010/11

In terms of real dollars:

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

FY 2011-2012

As we move into next year the BEA does anticipate limited growth (1%) that would generate total general fund revenue for the year of $5.86 billion.

But when you factor in Constitutionally required items and annualzations the budget gap is approximately $1 billion.

1. State Agency Restructuring Committee

2. Education Funding Reform

3. Health Care Funding Reform

Possible Solution Considerations

Proviso 89.136Proviso 89.136 We have 3 SubcommitteesWe have 3 Subcommittees

12 Member Committee

Co-Chaired by Rep. Cooper and Sen. Leatherman Other Members:

House – Bingham, Merrill, Loftis, Dillard, & Lowe

Senate – McConnell, Shoopman, Jackson, Hutto, & Alexander

1. Budget and Control Board

2. Health, Social, Environmental, and Criminal Justice

3. Education, Transportation, and Regulatory

1. State Agency Restructuring Committee

Possible Outcomes of Restructuring

Budget and Control Board Subcommittee: Abolish the current

Budget and Control Board and move many of its functions to a newly created Cabinet level Department of Administration

Review the need/function of the five-member Budget and Control Board

Health, Social, Environmental, and Criminal Subcommittee: Combine Sea Grant

Consortium and the Conservation Bank with DNR

Consolidation of PPP and Corrections

Consolidation of state-wide law enforcement agencies (DNR, PPP, SLED, DPS)

Possible Outcomes of Restructuring cont.

Education, Transportation, and Regulatory Subcommittee: Board of Regents Model or further enhance the role of

the Commission on Higher Education

Department of Cultural Affairs (State Museum, State Library, Dept. of Archives and History)

Combine Minority Affairs, Consumer Affairs, and Dept. of Human Affairs into a single agency

But even if we do all that…

… and then begin to completely zero out agency general fund budgets, it really does not get us very far.

To achieve the dollars savings needed….

The new state organizational chart would look something like this. This would be all that exists in State Government.

The new state organizational chart would look something like this. This would be all that exists in State Government.

Everything else would be gone….

Department of Transportation Codification of Laws & Legislative Council Department of Natural ResourcesProcurement Review Panel USC - Sumter HouseState Ethics Commission Wil Lou Gray Opportunity School Department of Parks, Recreation & TourismGovernor's Office - Mansion Legislative Printing University of CharlestonSea Grant Consortium Museum Commission Department of Probation, Parole & Pardon ServicesCommission on Minority Affairs John de la Howe School Higher Education Tuition GrantsDepartment of Employment & Workforce Department of Agriculture Governor's Office - SLEDDivision of Aeronautics Attorney General Clemson PSAUSC - Union Department of Commerce Judicial DepartmentSecretary of State Lieutenant Governor Department of RevenueDepartment of Consumer Affairs Adjutant General MUSC Law Enforcement Training Council Lander University B&C Bd. - Employee BenefitsHuman Affairs Comission USC - Aiken Clemson University (E&G)Election Commission Department of Alcohol & Other Drug Abuse Services Department of Public SafetyLegislative Audit Council Governor's Office - OEPP Department of Health & Environmental ControlUSC - Salkehatchie USC - Spartanburg Department of Juvenile JusticeDepartment of Labor, Licensing & Regulation State Library Aid to Subdivisions - Dept. of RevenueUSC - Beaufort Commission on Indigent Defense University of South Carolina - ColumbiaUSC - Lancaster Consortium of Community Teaching Hospitals Technical & Comp. EducationAdministrative Law Judges Prosecution Coordination Commission B&C Bd. - Capital Reserve FundState Treasurer The Citadel Commission on Higher EducationGovernor's Office - ECS Vocational Rehabilitation Department of Social ServicesWorkers' Compensation Commission Coastal Carolina University Department of Disabilities & Special NeedsDepartment of Insurance ETV Department of Mental HealthArts Commission Forestry Commission Debt ServiceSC State PSA Francis Marion University Aid to Subdivisions - TreasurerComptroller General School for the Deaf & the Blind Department of CorrectionsCommission for the Blind South Carolina State University Health & Human Services Finance CommissionArchives & History Senate Department of EducationB&C Bd. - Auditor Winthrop University

2. Education Funding Reform

1. Simplification and Consolidation of the funds in the EIA and the K-12 General Fund, to include the (EFA) to streamline funding to districts and provide maximum flexibility.

2. Diploma Requirements – create multiple diploma tracks:

Occupational Track - for students with IEPs Standard Track – 20 credit hours Advanced Track – 24 credit hours

3. Modify the Index of Taxpaying Ability There is a study committee that is set to report January 1st

3. Health Care Funding Reform

Current Year: HHS will come before the B&CBd. next month to

request approval to run a deficit for the current FY (2010/11) of $354 million

Next Year: HHS’s budget request for next year (FY 2011/12) is

$663 million (that does annualize their deficit).

Possible Solutions? 1 – Reduce Enrollment – limited on what we can do

here by Health Care Reform 2 – Change/Eliminate Services Offered 3 – Reduce Reimbursement Rates

Health Care Funding Reform cont.

What are our optional programs?

Chiropractic Services for Adults Clinic Services for Adults Dental Services for Adults ESRD Vitamins and Nutritional

Supplements Hospice Services for Adults Psychiatric Hospitals for Children ICR/MR Integrated Personal Care Optometry Services for Adults Pharmacy for Non-Institutionalized

Adults Podiatry Services for Adults Outpatient Services for Adults in

Home Health RBHS for Adults Rehab Therapy for Adults

Climate Control Appliances Chore Services Eliminate Environmental

Modifications Incontinence Supplies Respite Care Medically Complex Children’s Waiver

– In Home Respite Medically Complex Children’s Waiver

– Medical Day Care Nutritional Supplements Telemonitoring Program of All Inclusive Care for the

Elderly

If we completely eliminate all of the above programs we reduce the cost of the program by $100 million per FY.

Health Care Funding Reform cont.

In terms of provider reimbursement rates the savings are again limited.

A 3% reduction across all provider types would save: $29.9 million

While a 10% reduction across all provider types would save: $100 million It is expected that a 10% rate cut to some rural hospitals

would force them to close their doors.

Questions?

REP. DAN COOPER

CHAIRMAN, WAYS AND MEANS COMMITTEESOUTH CAROLINA HOUSE OF REPRESENTATIVES