Lawmakers Monday rejected Gov. Nikki Haley’s proposal that the state cut its budget by requiring state employees to pick up the added cost of their health insurance.

They also balked at her suggestion that the state eliminate $1 million from its budget earmarked for the 2012 presidential primary.

But S.C. House members said they were open to other proposals from the new governor, such as eliminating $5 million earmarked for an aerospace research center at the University of South Carolina.

Haley sent a list of budget recommendations to House lawmakers Monday as they began floor debate on the state’s $5.2 billion spending plan for the budget year that starts July 1.

The House budget would close an estimated $700 million shortfall by:

• Cutting state money for Medicaid, the health care program for the poor and disabled

• Spending less on K-12 education, colleges and universities

• Making cuts to state agencies

With the economy and state revenues beginning to recover from the Great Recession, lawmakers had an additional $350 million to spend on next year’s budget. But the state finds itself having to cut services because that new revenue is not enough to offset lost federal stimulus money and the growing cost of existing services, such as Medicaid.

In a Monday letter to lawmakers, Haley said she had been focusing on the budgets of the Cabinet agencies that report directly to her, since taking office in January, but wanted to suggest a few other cost-saving measures. They included having state employees pick up the entire increased cost of their health insurance instead of splitting that increase with the state.

“As the taxpayer already picks up over 70 percent of a State employee’s health care coverage, I believe those receiving the benefit should pay for the increase,” Haley wrote.

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