COLUMBIA -- Government spending fell by another $200 million Thursday when the state's budget oversight board handed 4 percent cuts to already ailing agencies.

The lingering recession and South Carolina's gripping 11.8 percent unemployment rate spelled more bad news for agencies that have been rocked by more than a billion dollars in cuts since last year. Because people are working less and spending less, the state is collecting less in taxes, said Senate Finance Committee Chairman Hugh Leatherman, a Florence Republican.

"Until we create jobs for people, we face uncertainty," Leatherman said. "That's the key to it. The unemployment rate is way up. We just absolutely have got to create jobs for our people."

State government will operate on $5.7 billion for the current fiscal year.

On the table when legislators return in January are several proposals to create jobs and stimulate the economy through new tax structures and incentives for employers to hire workers who have been collecting unemployment checks. Meanwhile, the Department of Commerce, legislative leadership and Gov. Mark Sanford pledge that they're actively recruiting companies.

Agencies were still sorting through the implications of Thursday's Budget and Control Board meeting.

The College of Charleston will have to cut $1 million. Mike Robertson, director of Media Relations for the college, said administrators are trying to pinpoint areas to cut spending that will have the least effect on students and the educational experience.

Bill Byars, director of the state Department of Juvenile Justice, said he has been bracing for more bad budget news and had some ideas about where the agency could cut another $4 million.

"We have been moving to put some things in place that will hopefully allow us to absorb the cut that we have," Byars said. Because juvenile crime has been on the decline for the past six years, the population has decreased and allowed the agency in the last year to close a group home and two dorms and shut down a wilderness camp, he said.

The Medical University of South Carolina will be cut by nearly $3 million, an action that it was expecting, given the news of the budget shortfall.

"Although still recovering from the loss of 27 percent of its state funding last fiscal year, the faculty and staff have worked hard to operate more efficiently and generate other sources of revenue," Dr. Ray Greenberg said in a statement. "Again, every effort will be made this year to limit any adverse consequences on employees and services."

Other cuts include: $5 million from the Department of Social Services, $1 million for the Department of Parks, Recreations and Tourism, $32 million for the Department of Health and Human Services, and $4 million for the Department of Health and Environmental Control. The Department of Education will be cut by $85 million, most of which will be passed on to local schools.

Sanford, who chairs the Budget and Control Board, said the worst probably isn't over, especially because of federal stimulus money that created an unsustainable level of spending for a two-year period. When the federal cash runs out, agencies will face another round of cuts, the governor said.

"I don't think we're out of the storm yet," Sanford said.