Health care funding in spotlightFeds sweeten Medicaid dealBy Bill Davis, senior editor
FEB. 27, 2009 -- With federal stimulus dollars pushing the ratio of how much the state gets back on matching Medicaid funding from 3:1 to 4:1, the debate over raising the state’s per-pack cigarette tax may change.
 Because of state cuts over the past year, the state’s Department of Health and Human Services has taken a $137 million hit to what had been a $1 billion budget.
But thanks to President Obama’s stimulus package, the department could be in line for an $173 million infusion. That is, if the department reinstates 2008 eligibility requirements for state health care programs.
DHHS spokesperson Jeff Stensland confirmed Thursday that his agency planned to do that, but was reviewing the ramifications. Stensland said to qualify for the federal money, the department would have to spend an additional $9.3 million to revert to last year’s eligibility requirements.
Stensland said the $173 million would likely be just a first installment, with the state health care system having received as much as $800 million from the federal government by Dec. 31, 2011.
While a 9-for-173 deal may seem like a no-brainer, DHHS has to be careful, as many legislators, who have eventual control over its budget, and the governor have expressed serious reservations about the sanity of the federal bailout.
The concern would be that the $9.3 million would become an annual expenditure, outlasting the stimulus package’s funding horizon.
Gov. Mark Sanford’s office did not return calls for comment on this issue, as it hasn’t on several stories of late.
Stimulus money helps to create budget options
But the stimulus package, especially if it were to reach $800 million, does offer the state some budgeting flexibility because the General Assembly could rely on the stimulus money for a chunk of what it normally spends on Medicaid.
House Ways and Means chair Dan Cooper (R-Piedmont) said Friday it was a “real possibility” that some members of the House would use that extra federal money as a catalyst to further push for the looming cigarette tax increase to shore up state budgeting holes, and not just fund state health care programs.
 That’s already happened, as last week Rep. Gary Simrill (R-Rock Hill) proposed using an increased per-pack increase to cover the $122 million cut from the Ways and Means proposed budget that had been earmarked for counties and municipalities.
So, in essence, the question may become whether the federal sweetening of the Medicaid pot will sour parts of the cigarette tax increase proposal.
House Speaker Bobby Harrell (R-Charleston) last year scotched the deal that would have increased the state’s 7 cents per-pack tax, one of the lowest in the nation, to 50 cents because he said it would expand Medicaid and not be “revenue neutral.”
Harrell this year has put forward proposed legislation for a 50-cent cigarette tax, a 43-cent increase, that would help cover the health care insurance premiums of the working poor.
What remains to be seen is if Harrell, who has become more brassy in his leadership since announcing he wouldn’t run for governor, will be amenable to plans like Simrill’s, or if he will adopt a Sanfordian “my way or the highway” posture.
This is especially important as the cigarette money would stretch beyond the stimulus’ lifespan.
Regardless, Sen. Tom Alexander, chair of the Senate Finance medical subcommittee, said it would be in the best of interest of the state if the legislature dealt with the stimulus money and the cigarette tax increase as separate items.
Allan Stalvey, senior vice president of the S.C. Hospital Association, agreed with Alexander. “We’d hate to see the cigarette money dumped into the General Fund because it would be so hard to see it come out,” he said.
While the Hospital Association has worked to make sure the cigarette tax increase goes to protect Medicaid funding, Stalvey also said he supported Harrell’s bill, since it would have the effect of expanding health care to more people in South Carolina.
Crystal ball. For Harrell’s plan to work, the state would have to get a waiver from the federal government that the money given out in premium assistance is the same as state health care funding. It worked for Oklahoma in a similar plan, so why not here? With a waiver a seeming certainty, Harrell’s plan should pass the House. But once it gets to the Senate, there could be trouble. While most in the Senate will love passing on a revenue-neutral gift to small businesses struggling to offer health insurance to their employees, Alexander’s hope that the cigarette tax and Medicaid funding will be kept separate from politics may be, at best, hopeful.
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House, Senate to enjoy relatively easy week
With the Senate having passed its own TRAC (tax realignment commission) legislation, the House will follow suit. Using how the state deals with sales tax exemptions as a launching pad, the House version will also deal with Act 388, the property tax reform measure from two years ago that switched K-12 education funding from local property taxes to sales taxes, as well as the rest of the state’s tax code. It will also soon begin debate on spending limit legislation in hopes of curbing the ups and downs of the last five years in the state budget.
Additionally, legislation will be introduced on the floor of the House this coming week that will dedicated the sales tax on cars to roads and bridges projects, roughly $10 million annually. As required by state law, the proposed budget has to be available to members for a week before it can be debated on the floor. The budget will hit the floor the following week.
In the Senate, fresh from squeezing out port reform and the TRAC legislation, activity is expected to be relatively quiet. The joke going around is the Senate is suffering from “post-PORTem depression.” Yuk.
Look for committees to provide the majority of the heat next week as the full Senate waits for the House budget. Insiders say that Employment Security Commission reform, payday lending, spending caps and potential creation of a Department of Administration will be the most lively debate next week.
In Senate committee work, the Medical Affairs subcommittee will meet Wednesday at 12:30 p.m. in 308 Gressette to discuss a host of pending legislation, including age requirements for getting a tattoo and organ donation. The subcommittee will reconvene the next day at 10 a.m. in 308 Gressette.
Members from both the House and the Senate will attend the Sentencing Reform Commission on Thursday at 2 p.m. in 105 Gressette.
In state agency news, the board of the South Carolina Arts Commission will meet Tuesday from 10 a.m. to 2 p.m. Location: S.C. Arts Commission, 1800 Gervais St., Columbia.
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Voter ID may face hurdles
The House passed a voter I.D. bill this week that, if it survives the Senate and the governor’s veto pen, would require a person to show a form of state identification before being allowed to vote.
Critics have decried the bill as an undue erosion of civil liberties, and as an unneeded expense. State Democratic Party chair Carol Fowler said the bill was a sign that state Republicans were “running scared” after record voter turnout in last November’s general election.
When it became clear the bill would pass, black House members staged a walkout. Speaker Bobby Harrell (R-Charleston), primary sponsor of the bill, responded to the expense complaint by including a provision in the bill to make state I.D.s free. “A picture ID is required to do just about anything in our society, except to vote,” said Harrell, defending the bill.
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Sanford takes stimulus money
Conservative talk show rhetoric aside, Gov. Mark Sanford has begun to accept federal stimulus money. This week, he announced he would accept some of the federal stimulus money in order to issue $25 more a week in unemployment benefits. The state Department of Health and Human Services has announced it would restore its 2008 eligibility requirements to accept a first payment of $173 million from the stimulus.
Interesting note: This wasn’t the first time for the governor to accept “stimulus” money, as Sanford apparently accepted a lesser-known DHHS federal bailout package in 2003, according to one Senate staffer.
Eighth grader provides political grist
Teen-ager Ty'Sheoma Bethea has caused quite a stir with her letter to President Barack Obama citing the needs of her high school in Dillon. Impressed, Obama’s office invited the eighth grader to the president’s first address to Congress, and singled her out during the speech this week.
As a result, Senate Democratic Leader John Land (D-Manning), has called on Gov. Mark Sanford to visit and tour the school, J.V. Martin Middle.
"Sanford needs to cut back on his national travel schedule and look within his own state at the problems that can be addressed with recovery dollars from the federal government,” said Land, the second-longest serving representative in the House.
Tax attack moves forward
The Senate voted 38-2 this week to form a tax realignment committee to look at coming up with a plan within two years to streamline the state’s tax code. The vote is the next step in the process of changing how the state raises revenues, which has been criticized for not being business-friendly, and not easily understandable, among others.
A key provision in the bill passed this week was that the study committee would come up with a plan, not necessarily cut taxes. The Senate, reeling from state budget cuts thanks to past tax cuts -- grocery, for instance -- appears to be looking at all options and maybe not just what’s politically advantageous.
Full-time legislator
State Senate President Pro Tempore Glenn McConnell (R-Charleston) announced last week that he has decided to retire … from running a historic/Confederate gift shop. “It was a tough decision, but I told (my brother) Sam, it was time,” said McConnell, who has run CSA Galleries in various spots in the North Charleston area for years. The shop will close March 21.
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Legislators need to stop forgetting rural areasBy Andy Brack, editor and publisher
FEB. 27, 2009 - - The state’s unemployment rate is anything but heartening. But more than half of the counties in the state would probably give some eyeteeth for a rate that’s not in the double digits.
 Based on December figures, the state’s 9.5 percent jobless rate was the third highest in the country. It’s expected to get worse when January’s late numbers finally roll in. Observers are predicting a 10.5 percent statewide unemployment rate. That’s a club no county wants to be in – a place with more than 10 percent joblessness. Some 27 mostly rural counties, however, already are in that boat.
A high unemployment rate isn’t good anywhere, but it’s really hurting South Carolina’s rural areas. Just think:
- Education. Many of the areas with high unemployment – as much as 19.7 percent in Allendale County – have persistent education gaps. They’re still suffering today from decades of school underfunding because many school dollars used to be provided by local property taxes at a time when a mill of taxes in a rural area might bring in $17,000 - - 100 times less than a larger county on the coast with a big tax base. When potential employers see a struggling school system in a rural county, they often look elsewhere.
- Job shift. Agriculture used to provide lots of jobs in rural parts of the state. But with increased mechanization and the erosion of small family farms, there’s not as much farm work for rural residents.
- Brain drain. Talented young people from rural areas often don’t return because opportunities aren’t as great at home as they are in cities. So the future leadership pool to provide innovation for rural areas spirals away leaving gaps in small communities.
- Politics. In the state’s top 10 counties for high unemployment, Republicans are represented only on two of the county delegations. Democrats represent most people in rural areas, yet they don’t control what happens in Columbia at the Statehouse. So the people making the decisions about things like keeping smaller university campuses open, steering State Commerce Department opportunities and improving technical colleges don’t have as much of a connection with rural areas.
- Geography. Similarly, the power centers today are in the urban Upstate and the Charleston area, which is called home by the governor, House speaker and Senate president pro tem. Eighty years ago in hard times, the people who controlled South Carolina lived in rural areas thanks to the power of home rule. Today regardless of political party, rural areas just don’t have the power they had to be able to steer help their way.
State Sen. Brad Hutto, an Orangeburg Democrat who represents several rural communities, says rural legislators have to do a better job at getting urban lawmakers to spread some of the state’s limited resources.
 When they want improvements to draw in large industry in the Upstate or Lowcountry, rural lawmakers don’t generally object, Hutto notes. Now with jobs so scarce and the real possibility that some counties may go into 20 percent unemployment, rural areas need a little help.
“Sometimes they do forget and we have to remind them,” Hutto said. “But we’ll keep at it.”
Fortunately, he added, there are positive things happening in rural areas.
“It would be very frustrating if we saw no progress, but we’ve seen progress,” Hutto said.
A new inland port in Orangeburg County is expected to bring thousands of jobs in the years ahead. Barnwell County, which is losing a jobs-rich residential air conditioning manufacturing plant, recently attracted two new small industries. A biodiesel facility is looking at Hampton County.
Rural parts of our state still have some great opportunities for businesses. South Carolina legislators need to remember the heritage of these areas and not forget them during coming budget debates. Among the things they could do is steer more education funding to improve schools and technical colleges, inject innovating programs and help to grow small businesses, and work smarter to generate partnerships that can generate jobs.
More than anything, South Carolina’s leaders need to stop forgetting rural areas and to help them get back on track.
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SC Chamber of Commerce The public spiritedness of our underwriters allows us to bring SC Statehouse Report to you at no cost. This week's spotlighted underwriter is the South Carolina Chamber of Commerce. As the premier advocacy organization in the state, the South Carolina Chamber of Commerce will serve as the unified business voice for promoting an economy of increased productivity and per capita income to achieve global competitiveness. Our work includes efforts to decrease business costs and increase productivity; build a highly-skilled, capable workforce; nurture entrepreneurial development; foster a favorable climate among our members and their employees; and Improve quality of life for all South Carolinians. For more, go to: www.scchamber.net.
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Congress fails to see the job canary By Steven H. Coe
President, SC Chapter of the American Institute of Architects
FEB. 27, 2009 -- Architects met in Washington earlier this month to meet with congressional leaders to urge them to place a priority on investments in infrastructure.
 Unfortunately, many leaders did not feel supporting provisions to create jobs while simultaneously improving the quality of communities and benefiting the environment was a good use of government funds. The Senate “compromise” eliminated $19.5 billion in infrastructure spending for schools and cut another $1.5 billion for energy efficient federal buildings. With those cuts, the Senate tossed aside more than 500,000 jobs that might have benefited our local communities and national economy. More importantly, they failed to consider the impact of those cuts on long-term jobless rates.
An average project requires roughly eight months to design and complete construction documents, and upwards of twelve months of construction, creating hundreds of jobs. Like a canary in the coal mine, the economic health of the design profession proves to be a good gauge for the future of construction. In 2007 nonresidential construction in South Carolina totaled an estimated $9.7 billion and contributed a total of $22.5 billion (14.7 percent) to state GDP of $152.8 billion. Clearly the health of the construction industry is important to the health of our economy. If architects aren’t busy the effect on construction is soon to come. Architectural firms have had to deal with few business opportunities and are laying off employees and reducing pay. State budgets have been slashed and public sector projects have been put on indefinite hold or cancelled, leaving architects, engineers and construction firms with little to no work. The Senate's compromise only slows the momentum of jobs creation needed to get the economy moving again. Our congressional leaders generally turned their backs on immediate job creation that was within their reach.
Buildings represent green challenges, opportunities
The issue is deeper than just creating jobs in the short term to fend off the struggling economy. While most people assume that pollution from cars and factories are the leading cause of global warming, the true sleeping giant is the built environment. Statistics from the U.S. Department of Energy calculate that buildings account for nearly half (48 percent) of all greenhouse gas emissions – far more than transportation (27 percent) and industry (25 percent). Buildings also account for 76 percent of all electricity generated at power plants. Many provisions the Senate chose to cut from the stimulus plan dealt with this head-on by providing much needed incentives and funding to “green” federal buildings and schools.
Schools across our state remain overcrowded and under-maintained. Nationwide statistics show nearly $45 billion is required per year to maintain school’s current conditions with construction needs adding another $45 billion. With increasing population each year the overcrowding problem will only get worse in South Carolina. This is coming at a time when communities across our state are cutting budgets and cancelling projects. The future of our schools only seems to have gotten worse with the cuts to the proposed funding that were originally in the stimulus bill.
The federal government alone has jurisdiction over a significant portion of all buildings in the U.S. By requiring significant energy reduction targets in new and renovated federal buildings, the government would have demonstrated to the private sector that it is leading by example. It would have helped show significant energy reductions are both practical and cost-effective. A fully funded federal commitment to construction and renovation projects would have put Americans back to work and generated economic activity nationwide.
Direct investment in building construction and renovation, rather than just tax cuts, would have created jobs in the short term and also would have established a foundation for sustained economic growth. While thousands of architects, engineers, contractors, subcontractors, materials suppliers and countless other peripheral businesses in South Carolina face an unknown future, the stimulus bill will be signed into law. Opposing the provisions of the stimulus that would have directly resulted in new projects will only continue the downward slide of unemployment that so many in the design and construction industry are grappling with today.
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2/27: Stimulus bill won’t work
To Statehouse Report:
I always try to take time to read your articles in the "Free Times", because I learn from your writing.
In your Feb. 18 article "Moving Target," you wrote that there is talk and worry in the Statehouse that Mark Sanford has been right all along and that the stimulus bill will not work. Bravo for even raising the possibility.
Of course, Mark Sanford has been right. Of course, the stimulus bill will not work. In fact, the stimulus bill will make the economic and monetary crisis in the U.S. much, much worse. The bill will hasten and expand the inevitable massive inflation and the massive drop in the value of the dollar. In actuality, the inflation has already happened by creating further debt and printing more money (the inflation in the number of dollars in existence has already occurred). The resulting massive increase in prices have not hit yet but will be making its presence felt sooner than later.
I appreciate your reporting.
-- Mark Syverson, Columbia, SC
2/21: Ports piece was enlightening
To Statehouse Report:
Your piece on the SPA helped me put the fuss over the Ports Authority in perspective. Really doesn't look as bad as some who simply hate the governor are claiming.
-- Brett Bursey, Columbia, SC
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Up, down and in-between PSC. The S.C. Public Service Commission struck a blow for common sense this week when it shot down Duke Energy’s “Save-A-Watt” program which encourages customers to lower their monthly power bills through a host of conservation techniques, but rewards the power company with higher rates to offset the lower usage. More: The State.
Ty'Sheoma. Eighth grader Ty'Sheoma Bethea drew the nation’s attention to the still deplorable condition of some of South Carolina’s public schools at Obama‘s Congressional address this week. Wonder if Gov. Mark Sanford would “vouch” for her. More: The State.
 Sanford. Accepting even some of the federal stimulus money was a good start. But didn’t it show you don’t really buy into that bankrupt libertarian nonsense, and that Rush Limbaugh is an “idiot?” More: Alternet.
 MMA. The House just passed a bill that would allow mixed martial arts fights in the state. Great, just what Myrtle Beach needs, two more grown shirtless men sweating and grunting on top of each other as one tries for a “full mount ground and pound” in ultra-tight Lycra shorts. Classy. More: The State.
Columbia Metropolitan. Forbes Magazine just listed the airport as the third biggest rip-off in the country for commercial airlines. More: The State.
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Hey, buddy ...
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