South Carolina’s Federal Stimulus Money

Posted on April 3, 2009 • No Comments

Last Wednesday, the Senate Finance Chairman and each of his finance committee chairmen told State Senators what the budget would look like if it didn’t include the $700 million dollars of stimulus money ($350 million for this fiscal year) that Gov. Mark Sanford has said he will not accept if he can’t use it to pay down state debt.

My position in regard to this $700 million – a portion of the $8 billion in overall federal stimulus money allocated to South Carolina – is different than Gov. Sanford’s. I want him to apply for this $700 million, even if he can’t use it all for debt reduction. If it can’t be use for debt reduction, then it should be used in other fiscally-conservative ways that are permitted by the federal stimulus act, such as for capital expenditures on education infrastructure.

The primary objective, I think, is to avoid using the federal stimulus money to pay for things that will need continued funding after the federal stimulus spigot is turned off in two years. And along with other conservative legislators, I will work in the weeks ahead to broker a compromise between the governor and the House and Senate budget writers on the use of this money.

But the specific point I want to make now is this: the Senate’s budget writers showed us a budget last Wednesday that had thousands of teachers being laid off, prisons being closed, poor people being kicked out of Medicaid, and so on. It was a scary budget that we were told was inevitable if it did not include the $350 million of stimulus money for this fiscal year that Gov. Sanford has control over.

I discovered later that evening, however, that budget presented to us did not include $578 million dollars in federal stimulus money that the governor had already said he would accept. The House, in passing its budget, properly proposed the appropriation of this $578 million. But the budget presented to State Senators by the Senate budget writers did not.

The obvious question is: why didn’t they? I think that that money was intentionally excluded in order to come up with an “End of Days” budget to be used for a blatant political purpose – that is, to ratchet up pressure on the governor to apply for the federal stimulus money that he has discretion over. Again, I think applying for that money is in our state’s best interests, if we use it to pay for non-recurring items, but that does not justify the presentation of a sham budget that ignores over half a billion dollars of available revenue.

And I said exactly that at a press conference yesterday with Gov. Sanford (see video clip below, starting at the five minute mark). Please take a look and let me know what you think about this.

My remarks start at the five minute mark.
The rest of this clip can be found here.