COLUMBIA — South Carolina will operate on a bare-bones $5.7 billion budget stripped of money Congress provided for the state to carry its education and public safety programs through the recession.
The fight over $700 million in stimulus cash simmered in the session's waning hours Thursday, with Gov. Mark Sanford having filed a lawsuit in federal court to block the state from receiving the money.
During the four-month session, dealing with the stimulus feud consumed much of the Legislature's energy and focus. The Senate spent Thursday overturning the bulk of Sanford's budget vetoes while leaving many major issues, including a cigarette tax increase, sitting on their desks until next year.
The two-term Republican governor has been against the stimulus package
from the beginning. He told the Legislature he would not take the only portion within his control, $700 million over two years, unless the state would use an equal amount of its own dollars toward paying down its debt.
The Legislature instead planned to use $350 million in the budget that begins July 1 for public schools, colleges and universities, prisons and law enforcement. The second $350 million installment would be used in the next budget.
A lawsuit was expected, but many were surprised that the governor filed it.
The case does not jeopardize the rest of the budget. The stimulus money will be tied up in the court battle indefinitely.
Sanford said his decision to sue was not based on his opposition to the stimulus money, but on the Legislature's overstepping its position and upsetting the balance of power in state government.
"What this represents is an unprecedented power grab," he said, adding that the case has implications for future South Carolina governors and executive branches across the country.
Columbia lawyer John Foster of Kilpatrick Stockton has taken Sanford's case pro bono. Sanford said he views the suit as a pre-emptive strike against related lawsuits that have been threatened.
Sanford said he hopes the Legislature will sit down and negotiate in good faith. If Congress takes action that affects the stimulus feud in South Carolina, Sanford said he will drop the case.
House Speaker Bobby Harrell, R-Charleston, said legislative leaders have been willing and waiting to compromise.
"Enough is enough," he said.
The stimulus cash would have infused public schools with $185 million.
The share for districts in Berkeley, Charleston and Dorchester counties would have been roughly $12 million. Most of the cash would have supplemented operating expenses after mid-year budget cuts left public schools with less money.
Before Lowcountry districts turn to teacher layoffs, finance directors in Berkeley, Charleston and Dorchester counties have said they would not replace teachers leaving at the end of the school year.
Allyson Duke, chief financial officer for Dorchester District 2, said class sizes will grow. The districts will be without about 30 teaching positions and 50 other employees, such as administrators and custodians.
To balance the budget without the estimated $3.8 million in stimulus funds, District 2 teachers will be required to take two days of unpaid leave, while administrators will be furloughed for four days, Dukes said.
Mike Bobby, chief financial officer for Charleston schools, said the $3 million his district would receive in stimulus funds would save teachers from taking up to three days of furloughs and administrators from taking unpaid leave of up to six days. The district is relying on attrition to avoid layoffs, Bobby said. Last year, 400 teachers retired or left.
The state's colleges and universities would receive $100 million from the stimulus funds in question. That includes about $2.5 million for The Citadel, $4.7 million for the College of Charleston and $12.7 million for the Medical University of South Carolina.
That potential loss and recent mid-year budget cuts add up to more than 25 percent of what South Carolina provides its higher education institutions.
The result could drive up tuition, which typically is set in June.
College of Charleston President George Benson said that aside from the possible impact on tuition, the lawsuit jeopardizes the college's ability to provide student scholarships and other programs.
"We recognize that the stimulus money would provide only two years of partial funding for higher education in South Carolina, but this money is desperately needed to temporarily restore some of the significant state budget cuts colleges and universities have already absorbed," Benson said. "This stimulus money would serve as a bridge to get us through the next two years."
The state prison system will receive $23 million less until the stimulus situation is resolved. For the Department of Public Safety, $15 million is on the line.
Josh Gelinas, communications director for the Department of Corrections, said the prison system will continue to run as it is now. The agency is running a $45-million deficit this year that is being covered by the Budget and Control Board, an entity that operates much like a Department of Administration in other states. The stimulus cash would have helped the prisons avoid a future deficit.
The Public Safety Department would use the stimulus money to put more troopers on the highways, but Sid Gaulden, director of the agency's office of executive affairs, said the department did not want to comment further until the legal challenge is settled.
What they're saying
"This is about two fundamental principles, one of which is the principle of separation of powers, something our founding fathers thought absolutely key to a well-functioning democracy. If a legislature in this state or any other has the ability to arbitrarily change the terms of federal law, then why even have governors? Two, this is ultimately about protecting not just this generation of taxpayers but future generations as well, which is why we've pushed for putting stimulus money toward debt repayment."Gov. Mark Sanford, a two-term Republican. "South Carolinians need to know that Governor Sanford has already politically left this state, sometimes physically, but always mentally. This is just another press stunt to put him on the front page of the Wall Street Journal and in front of Fox News cameras. Governor Sanford's presidential aspirations and hunger for power are so strong that he is willing to put South Carolina's future at risk."Senate leader Glenn McConnell, R-Charleston."The first, most interesting fact to me is that the governor has gone outside of South Carolina to a federal court in order to sue his own state. I don't believe that has ever happened anywhere in this country, ever."House Speaker Bobby Harrell, R-Charleston."It's unfortunate that this drama must now play out in the courts. Like most South Carolinians, I was hopeful that the governor and Legislature would be able to resolve their differences on the budget."S.C. Attorney General Henry McMaster, named defendant in the case and a probable 2010 GOP gubernatorial candidate."If the state General Assembly substitutes themselves, then they in effect amended the federal law, and I have got a problem with that."U.S. Sen. Lindsey Graham, R-S.C."This session will be remembered more for what didn't get done than what did, and the blame lies solely at the feet of Mark Sanford."Sen. Minority Leader John Land, D-Manning.