COLUMBIA — Less than 10 hours before deadline, Gov. Mark Sanford sent a letter to the Obama administration Friday to accept on behalf of South Carolina all but $700 million of the nearly $8 billion in federal stimulus money the state stands to receive to jump-start its economy.
While many across the state can rest easy that food stamps and jobs rebuilding South Carolina roadways are on the way as the federal cash starts flowing, schools are still in trouble.
The two-term Republican governor warned the public school system, the intended primary recipient of the $700 million over two years, to not bank on getting the cash. Superintendent of Education Jim Rex, a Democrat, said Sanford's decision increases pressure on the districts that already are faced with making significant layoffs before next school year.
"Things are no clearer today than they were yesterday," Rex said in a statement Friday. "The situation is still confusing and contentious, and districts can't postpone their budget process indefinitely while they wait for this political drama to play out."
Sanford said he is not purposely picking on schools, but it just so happens that the only money he contends to have control over is that which is mostly aimed at education. The governor
said he will not apply for the $700 million in budget aid unless the Legislature uses an equal amount of state dollars to pay down debt.
The White House told Sanford twice that he could not use the federal money to pay debt, but the governor said he finds it "inconceivable" that the state would be barred from using its own money for debt payments.
Rex said Congress intended the budget aid to be used to create and save jobs, and he said all the governor is doing by shifting state money toward debt is "bookkeeping sleight-of-hand" that ultimately won't fly.
If the Legislature refocuses its priorities and reforms government programs, Sanford argued, then money would be freed up to help public schools maintain teachings staffs and fill budget holes.
The governor contends that the state has until September 2010 to accept the $700 million. Sanford, who has vehemently opposed the $787 billion American Recovery and Reinvestment Act, took the position that the budget aid is the only portion of the state's stimulus cash that he has the power to reject. Of the $700 million, about 82 percent is designated for education and 18 percent is for public safety and other services.
"We think it's incredibly important to pay first for the political promises that are on the table before you go out and make a bunch of new and additional political promises," Sanford said.
Sanford said he decided to send the letter to Washington to avoid a lawsuit on the advice of state Attorney General Henry McMaster.
In all, South Carolina could receive $8 billion, but much of that total is money available for tax relief, grants such as those for low-income college students and funds to help homes become better able to withstand the elements.
State government agencies will receive $2.8 billion, including $463 million for highway improvements, roughly $600 million for unemployment benefits, $389 million for food stamps, among other programs. Included in the $2.8 billion is the $700 million to help stabilize the state budget.
South Carolina taxpayers are obligated to pay back all the money, regardless of whether the governor sent the letter before Friday's deadline. The $700 million in question could be divided among other states if Sanford does not accept it at some point.
House Speaker Bobby Harrell, R-Charleston, said Sanford back-peddled from his original hard-nosed position against accepting the stimulus cash.
"We are pleased to see that Governor Sanford has reversed his decision to ignore hard deadlines and instead decided to certify funds that could have potentially been lost to other states but still repaid by South Carolinians," Harrell said in a statement. "I fully expect the funds will be used to restore cuts made to education, health care and law enforcement as originally intended and as the law clearly states it must be."
Sanford said his position has been consistent.
"We haven't changed one iota with regard to where we are on that," he said.
As Sanford waits on state legislators to agree to his terms, Rex said districts are being forced to build budgets based on worst-case scenarios. To make up the budget gaps in schools while obliging Sanford and paying down debt, legislators will have a careful balancing act.
Based on a survey of districts, the Department of Education estimates that next year public schools will have to eliminate 2,600 jobs, including 1,500 teaching positions.
That's down from initial projections of about 5,200 layoffs because the governor has agreed to accept other portions of stimulus money aimed at special education and high-poverty schools.
Berkeley, Charleston and Dorchester county schools could lose an estimated $18 million without the budget aid.
U.S. House Majority Whip Jim Clyburn, D-S.C., said he will do what he can on the congressional level to go around Sanford and deposit the $700 million in state coffers.
"Political posturing doesn't educate our children or protect our communities," he said in a statement. "I will continue to work on getting much-needed funding to South Carolina schools and law enforcement agencies as quickly and efficiently as possible. All options are being explored."