Nov/Dec 2009

State News: August 2009



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Sanford Wants Stimulus Funds for State’s Debt

By Mikel Chavers, CSG Associate Editor
A vocal critic of the American Recovery and Reinvestment Act, Gov. Mark Sanford wants to use $700 million of South Carolina’s share of Recovery Act funds to pay down his state’s debt.
The $700 million is a quarter of the funds the state will get through the Recovery Act, according to the governor’s office. The funds were originally intended to boost education through the State Fiscal Stabilization Fund, funded by the Recovery Act, according to Sanford spokesman Joel Sawyer. That pot of money goes to governors in the form of grants.
Sanford submitted a request to the White House last week asking to use those funds to pay down the state’s debt. According to Sawyer, that initial request was rejected by the White House.
“They have initially written back and said that they didn’t think it would be consistent to use it for debt repayment,” Sawyer said.
The governor’s office was writing a follow-up letter that “more narrowly defines our request in a way that we think would be consistent with their response,” Sawyer said Monday.
In that letter, sent Tuesday, Sanford said he wants to use $577 million of the stimulus funds to pay down debt from the State School Facilities Bonds and Research University Infrastructure Bonds over two years, according to the updated letter. Sanford wants to take another $125 million in Fiscal Stabilization Funds to pay down debt related to the state’s unemployment compensation trust fund and also paying down debt related to retirees, according to the March 17 letter.
But during the whole exchange, the Democratic National Committee ran ads in South Carolina critical of Sanford’s stimulus stance and his request to use Recovery Act money to pay down debt.
The ad features a voice saying, “South Carolina is facing tough times, but Gov. Sanford is playing politics instead of doing what’s right—turning down millions in Recovery Act funds, putting politics ahead of health care, jobs and schools.” That ad, now available on You Tube, ended with the line, “Tell Mark Sanford to stop playing politics with South Carolina’s future.”
The official response to the ad and the initial White House rejection from Sanford is: “We appreciate the White House’s response, as it represents a far more constructive form of dialogue than did the DNC attack ad now running in South Carolina,” Sanford spokesman Sawyer said. “… Part of a truly constructive response would be to call off the attack dogs from the DNC who are now attempting through political attack ads to determine our course of action. It’s time for the President’s game of good cop, bad cop to end, and therefore we again ask him to end these ads so we can engage in a productive dialogue on the merits or our request.”
Sawyer said the governor’s office hopes to hear back from the White House by week’s end on the governor’s second request to use stimulus funds to pay down debt.
Meanwhile, the South Carolina legislature is considering a concurrent resolution that aims to bypass the governor to accept stimulus funds and use them in the way they were originally intended. Senate Concurrent Resolution 577, sponsored by Sen. Hugh Leatherman, was introduced March 12.
The Senate Finance Committee voted Tuesday to pass the resolution 18-3, according to an article from the McClatchy newspaper service.
Referring to the governor’s concerns that the stimulus could create financial problems for the state in the future, Leatherman told The Wall Street Journal, “Being chairman of the finance committee, I too have concerns about annualization. But I am not willing to deprive our people of maybe creating a good job for them.”
Still, resolutions like this and a similar resolution in Mississippi—House Concurrent Resolution 64—beg the question of whether or not these types of resolutions, if passed, will carry much weight.
A congressional report released Wednesday says it might be unconstitutional for a legislature to supersede a governor in accepting and using economic stimulus money if the governor doesn’t claim the funds in the 45 day window, according to a McClatchy Newspapers article.
That Congressional Research Service report says millions of stimulus dollars for South Carolina and Texas, where governors say they will reject some of the money, are in danger, according to McClatchy Newspapers.
U.S. Sen. Lindsey Graham from South Carolina requested the report from the Congressional Research Service, McClatchy reports.
“Right now there is ambiguity in the law,” Graham told McClatchy Newspapers. “Can the legislature require funds from the stimulus funds for education or does it have to be the governor?”





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