Infrastructure funds to be diverted

COLUMBIA -- Gov. Mark Sanford's plans to keep the agency that oversees much of the state's bureaucracy running in the wake of his veto relies on raiding $13.3 million from a program set up to help local governments with water and sewer needs.

A state senator said the proposal would likely bring a legal challenge.

A statement the Budget and Control Board posted Friday on its Internet site the cash from the Rural Infrastructure Bank and would be used "for payroll and essential operating costs for the first quarter of the fiscal year."

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The board, which Sanford oversees, is responsible for overseeing dozens of key state operations, including running state computers systems, managing state human resources operations and making financial forecasts for the state budget.

Sanford's $29 million veto would have shut down an overhaul of the state's new accounting system; shuttered the Confederate Relic Room and Military Museum and required law changes to allow legislators to write bills without getting financial guidance from the agency.

The board agreed this week to follow state laws that let all agencies move money around to deal with shortfalls created as the state's general fund budget has plunged below $5 billion as the fiscal year began July 1 -- a reduction of $2 billion in two years.

"We're following the letter of the law in transferring this money," said Frank Fusco, the budget board's executive director after Sanford's staff put together the stopgap funding plan.

Democrat state Sen. Brad Hutto said the plan breaks the law. The Orangeburg Democrat was among dozens of rural legislators who worked for years to set up the Rural Infrastructure Bank to spur economic development.

"I guess a lawsuit will be next," Hutto said.

Sanford and board can't use money that's been set aside by the Legislature for a specific purpose, Hutto said. "It's a trust fund and I though one of the main tenants of this governor in eight years in office is we weren't going to raid any trust funds," he said.

Hutto noted the budget board's only role with that money is to hold it until it can be distributed.