SC panel to hash $235M in deficits

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COLUMBIA - The people who hold South Carolina's purse strings are about to sit down together for their first major meeting, and the outlook is not pretty.

The state's $5 billion budget is a wreck, and behind-the-scenes bickering has echoes of a family squabble as the Budget Control Board prepares to meet Tuesday. For instance, Gov. Nikki Haley's top aide snubbed the treasurer last week in a letter that said he was irrelevant to budget discussions.

Haley is the new chairwoman of the five-member, all-Republican board that oversees most of the state's bureaucracy and borrowing decisions.

The panel met briefly last month to hire a new day-to-day director. But this meeting will be dominated by whether the board will OK a $228 million bailout for the state's Medicaid agency and another $7.4 million for state prisons. The Department of Health and Human Services says it will have to shut off payments for Medicaid providers in March if the board doesn't approve a bailout.

Haley said Monday she was trying to narrow the shortfalls, but wouldn't say whether she'd agree to the bailouts.

"I am not comfortable with deficits," she said.

Shortfalls would be made up by state surpluses or reserves.

No one expects Haley's meetings will be anything like the marathon arguments presided over by her predecessor, Republican Gov. Mark Sanford.

Sanford had a penchant for arguing in detail on small points - such as how the state should sell a small piece of property - and large - like how much future debt the state's retirement system has.

Sanford frequently hoisted charts to drive home fiscal points. Once, when a fellow board member brought his own, Sanford broke out a pen and edited it.

"I've asked her about charts," board member and House Ways and Means Committee Chairman Dan Cooper said. "I hear we won't see a lot of those."

Now, one of Sanford's old property fights is back on the board's agenda. Sanford helped torpedo the sale of State Ports Authority property in Port Royal in 2007 and intervened repeatedly in development efforts. A deal to sell the property has fallen through again and now the Ports Authority wants to know what to do next.

Sanford, despite a knack for accurate warnings about the state's financial problems, routinely ended up on the losing side of 3-2 votes after protracted debates that left opponents shaking heads.

Haley, on the other hand, has spent weeks making sure she and Sanford's top antagonists - Cooper and Senate Finance Committee Chairman Hugh Leatherman - are meshing on budget issues.

"I've probably had more conversations with her in the past two months than in two years with Governor Sanford," Cooper said.

But that effort has also created a sideshow.

A week ago, state Treasurer Curtis Loftis asked about a meeting Haley had with Cooper and Leatherman. The meeting of three board members required public notice under the state's Freedom of Information Act, according to Bill Rogers, executive director of the South Carolina Press Association.

Reporters asked Loftis about the meeting, and Loftis said he'd ask Haley to provide details of what was discussed.

On Friday, Tim Pearson, Haley's chief of staff, snubbed Loftis with a note saying it was one of "many meetings the governor will have that involve the budget and other issues before the Legislature, and, being that he is not a relevant player in those issues, Treasurer Loftis will not be invited to attend those meetings."

Pearson also suggested Loftis butt out of issues in the governor's office and stop running to the media.

Haley downplayed the exchange and said the state has big problems ranging from high unemployment to health care cuts.

"I don't have time for the drama, and I won't put up with the drama," Haley said. "This is about jobs. This is about putting people back to work. This is not about creating something of who was in a room and who wasn't in a room."

Haley said board business wasn't discussed and the meeting dealt with budget writing, including projected Medicaid shortfalls. "It was absolutely not a violation in any way whatsoever," Haley said.

"You can't talk about the budget without talking about Medicaid and the deficit," Rogers said. "That is a quorum of the Budget and Control Board and they're discussing budgetary matters that conceivably could come before the Budget and Control Board. That's by definition a meeting of a public body and it has to be open to the public."


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