Financial leaders put off budget cuts

Gov. Mark Sanford listens to remarks Thursday during a Budget and Control Board meeting. The state faces a $200 million shortfall.

COLUMBIA -- South Carolina's financial leaders voted Thursday to delay a decision to cut $200 million from the state's budget, a move that means state agencies don't have to chop 4 percent from their budgets -- for now.

The Budget and Control Board voted to delay action until after the next revenue forecast from the Board of Economic Advisors, which has trimmed $328 million from its projections since the state budget was passed in May.

The economic advisers are expected to issue a new forecast next week, projections Senate Finance Committee Chairman Hugh Leatherman said he wants to wait for before deciding on the across-the-board cuts.

"I would like to see what comes out of that," said Leatherman, R-Florence, who also proposed that the Budget and Control Board reconvene next month to reconsider the cuts. "Hopefully things will get better."

Gov. Mark Sanford, who chairs the panel, took issue with Leatherman's projected optimism, arguing that the cuts likely are inevitable.

"Even if the news is better, come September, isn't this a reality that's going to have to happen anyway?" Sanford asked, saying an earlier cut might help agencies prepare to absorb the cuts. "I'm going to stay on the side of making the cut sooner rather than later."

Comptroller General Richard Eckstrom also argued for making the cuts now, to give state agencies more time to react.

"We all hope that the economy turns around, we're just not seeing that happen," Eckstrom said. "I believe that the sooner the agencies are given clear direction, the easier it is for those agencies to absorb these cuts."

But Leatherman said he prefers to wait.

"I frankly think, in this particular instance, the people of this state are better served if we wait and see what the BEA comes out with," Leatherman said. "Once we cut, we cannot go back."

The Board also voted to keep a $25 monthly surcharge tacked onto state health insurance in 2010 for employees who smoke. That surcharge is set to go up to $40 in 2011, an increase Leatherman opposed.