Editorial: Spend State’s Surplus Revenue On Medicaid

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An editorial from The State:

LESS THAN SIX months ago, our state’s leaders were fretting over how to survive a nearly billion-dollar shortfall in next year’s budget. They managed to agree on the cuts, but then a slightly better-than-expected economy generated $210 million more in revenue than forecasters predicted. So after voting to give half of that money to businesses in a one-time tax break, senators will debate today whether to hand the rest of it out in even more tax breaks or use it to pay off debts or build up reserves.

Either approach would make sense if the budget already were meeting our state’s basic needs. And if we had high taxes. And if we weren’t still in such a dreadful economic shape that one of every 10 South Carolinians who want to work can’t find a job. But it’s not, and we don’t, and they can’t.

Even before the recession, taxes and spending in South Carolina ranked at or near the bottom nationally. Since then, lawmakers have cut state spending by a quarter, and even if they spend the additional $100 million on government programs, the $6 billion budget for next year still will be down by 15 percent from the pre-recession level. As a result, we’ve laid off teachers and social workers and countless other workers, welfare payments have been slashed, Medicaid has cut benefits to recipients and payments to providers, and the courts are barely skimping by. Residents of only seven states pay less of their income in taxes than do South Carolinians, and the Legislature has cut annual taxes by more than $500 million since 2005. And in a state that always has had among the lowest wages in the nation, our jobless rate remains among the worst.

So rather than trying to score political points by slashing our already-low taxes, or seeking to avoid a free-for-all over the unanticipated revenue by putting it to some less-than-urgent use, legislators ought to be trying to make sure they provide for the legitimate needs of our state or leveraging the money in the way that will do the most to put South Carolinians back to work.

Happily, they can do both, by plowing it back into Medicaid and taking advantage of the federal government’s policy of sending $3 to our state for every $1 we spend to provide medical care to poor people.

We agree with critics who say that there are significant problems with Medicaid, but nearly all of those problems were created by and must be solved by the Congress. We agree that it would be wrong to ignore other essential services that are underfunded, such as schools or police, when deciding whether to do more to reduce the cuts to Medicaid. It would be even worse to spend more on Medicaid than we need to for the sole purpose of drawing the federal match — just as it’s wrong for local governments to build airports they don’t need in order to draw an even more generous federal match.

But within the flexibility it has, South Carolina always has provided fairly skimpy Medicaid benefits, and the gap between adequate funding and what the budget currently envisions is at least as great for Medicaid as it is for other essential services. So unless and until the Congress decides to fix the problems it created, it would be irresponsible to ignore the fact that by investing in Medicaid, we can put thousands of South Carolinians back to work in hospitals, doctor’s offices, nursing homes, pharmacies, medical equipment companies and countless other private businesses that provide services to those businesses.

And as an added bonus, we can keep more South Carolinians healthy — which will make them better able to hold down jobs whenever those jobs start coming back.

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