South Carolina Governor Suggests Using Savings from Spending Cut To Fund Medicaid

South Carolina Gov. Jim Hodges (D) has proposed extending a temporary 2.5% cut in state spending as a way to counter a Medicaid budget shortfall, the Columbia State reports. Hodges imposed the temporary spending cut this year when general revenues fell short of earlier projections. If the spending cut is made permanent, $122 million would be available for various budget needs, including Medicaid (Bauerlein, Columbia State, 4/19). The Department of Health and Human Services has indicated that it needs $185 million to prevent service cuts for Medicaid beneficiaries next year (Kaiser Daily Health Policy Report, 4/16). Hodges also has proposed borrowing funds earmarked for the cleanup of a low-level nuclear waste dump to fund Medicaid. The governor's proposal comes days after he made an agreement with state senators to take off the table a plan that would have raised the per-pack tax on cigarettes by 22 cents to fund Medicaid (Columbia State, 4/19). The tax would have generated about $83 million per year for the program (Kaiser Daily Health Policy Report, 4/16). The State reports that health advocates are "livid" with Hodges for killing the cigarette tax hike, saying the tax would have provided "consistent, long-term" funding for Medicaid. In response, a coalition of hospital associations and advocates for the disabled plan to rally on April 24 in favor of the tax at the state Capitol. In the meantime, the state Senate Finance Committee is discussing Hodges' spending cut proposal (Columbia State, 4/19).

Reforms, Not Taxes, Needed
Increasing the cigarette tax to fund Medicaid would only "stick a finger in one hole of a bursting dam" and would not solve problems caused by "inefficient government agencies," Don Weaver, president of the South Carolina Association of Taxpayers, writes in an opinion piece for the State. Weaver adds that the need to reform Medicaid "goes much deeper than taxing an already-overtaxed minority." If the cigarette tax is raised, South Carolina smokers would go to other sources -- nearby states or the Internet -- to purchase cigarettes, meaning that the state's revenue from the tax would decrease, Weaver states. As a result, the state's overall budget would be in "the same mess or worse" as the current Medicaid budget, he adds. Weaver suggests that lawmakers institute methods to verify eligibility of Medicaid beneficiaries, concluding, "Until our government stops wasting money and starts delivering Medicaid services efficiently to those who actually qualify for them, it isn't entitled to any more dollars from our hard-working citizens, smokers or not" (Weaver, Columbia State, 4/18).