Spending on Social Welfare Programs in Rich and Poor States. Final Report.. State Budget Development and Implementation

07/01/2004

South Carolina's budget process is dominated by the legislature. The governorship is one of the weakest in the nation. Until 1977, governors served only one term, so legislators were around much longer and exerted greater influence. In 1993, the Restructuring Act created eight appointed cabinet positions (the positions were elective before then). The state's governor submitted a budget for the first time in 1993.

Nonetheless, the legislature routinely ignores the executive budget. The budget process really begins with hearings with agency officials before the subcommittees of the House Ways and Means Committee. The subcommittees then get together and make recommendations to the full committee, which sends the budget to the full House. The chamber typically makes few changes in the committee's recommendations before passing the budget. The Senate develops its own budget more or less autonomously and in parallel. Differences between the two chambers-often large-are worked out in conference sessions.

The Senate is generally more supportive of social services than the House, partly due to the longtime leadership of the Senate Finance Committee chairperson, who has long been a strong supporter of Medicaid. His influence reflects another difference between the two chambers: the Senate tends to be dominated by seniority and individual senators, while the House is more controlled by committees and subcommittees. The greater role of subcommittees and committees in the House may account for its reported tendency to delve into greater budgetary detail than the Senate. For example, the House was said to look at performance measures more than the Senate. In recent years, the House also is reputed to ask more questions, look at more options, question Medicaid officials more skeptically, and look for evidence of fraud, abuse, or waste. Nearly all lobbying regarding social programs and the budget is directed at the legislature, not at the executive.

For the first time in the state's history, the government is entirely controlled by the Republican Party. Republicans won the House in 1994, the Senate in 2000, and the governorship in 2002.

The Department of Health and Human Services (DHHS) is the single state agency designated to administer Medicaid and SCHIP. The Department of Social Services (DSS) administers TANF, Food Stamps, child welfare services, foster care, child care licensing and regulation, adoption, adult and child protective services, and child support enforcement, CCDF, and SSBG. When the budget process involves budget cuts, agencies are generally instructed what percentage of their budgets must be cut, not exactly where, though this is less true for Medicaid, whose details are of greater interest to legislators. Mid-year cuts have been frequent in recent years; instructions specify a percentage to cut in agencies' budgets. Education and Medicaid traditionally have been exempted from mid-year reductions, though Medicaid is no longer exempt. Medicaid, unlike most other social programs, is allowed to run a deficit. Large and unexpected Medicaid deficits in recent years have hurt DHHS's reputation for management, though they have been paid.

Both DHHS and DSS administer contracts or agreements with other agencies to implement programs using funding streams they administer, especially Medicaid and TANF. Medicaid provides funding to 12 other agencies or institutions, the largest sums going to the Department of Disabilities and Special Needs, the Department of Mental Health, the Department of Education, and the Department of Social Services. DSS administers its programs through a variety of governmental entities. TANF, child and adult protective services, and foster care are administered by counties, while central or regional offices handle adoptions, licensing, and child support enforcement.

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