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SC governor, treasurer argue over DOT payments

Efforts to shorten the time it takes the state to pay bills for road construction were lost Tuesday in a verbal sparring match between Gov. Nikki Haley and Treasurer Curtis Loftis.

Haley said she was trying to keep the meeting professional while she said Loftis spoke out of turn like a grade-schooler. Loftis said the governor's approach to dealing with the cash crunch at her Cabinet agency, the Department of Transportation, is foolish and ill-conceived.

Hanging in the balance are construction companies and workers who are waiting 45 days to get paid for jobs repairing South Carolina's roads and bridges.

Shawn Hanna, partner of Hanna Sign Systems in Moncks Corner, told The Post and Courier the DOT's payment to them for work done on U.S. 17 in Berkeley County is five months late. He said the business is on the verge of closure.

"I hope our state politicians can sleep well at night knowing they may cause some of us to lose what we have worked so hard to get," Hanna said.

Loftis pushed for the Budget and Control Board to allow Transportation Department to float a line of credit to help DOT pay its bills on time. The agency has stretched its usual 30-day payment window into 45 days and is 21/2 months behind on its payments to the State Infrastructure Bank for loans on major construction projects.

Agency officials say the cash crunch comes during the peak construction season while the national economy has created a drag on resources, although at least one DOT commissioner argues the issue is due to poor planning.

Haley cut off the discussion before a resolution was reached at the Budget and Control Board meeting. The spat between Loftis and her, both Republicans, was over whether the board could vote on the matter without having first added it to the agenda at the start of the meeting. The board has five members. The governor is chairwoman.

Haley said Loftis should have pushed the agenda item to be added before the meeting. Loftis said Haley's office ignored him, a claim the governor disputed.

"I think the contractors of this state who work out in 100-degree heat ought to have the ability to get paid," Loftis said.

"Treasurer, it is not about the contractors getting paid," Haley interjected.

Loftis replied, "It sure is about the contractors getting paid. We can amend this. We can decide what we want to do."

Haley said Loftis' efforts are against board protocol.

"I think we need to let the secretary handle his agency the way he needs to," the governor said. "This is to be resolved. He is very aware of how he is supposed to handle this issue. ... We are not going to be adding agenda items just because."

It is unclear whether DOT will pursue a line of credit. If it does not, the agency expects for the cash flow situation to be resolved by the end of the year.

Haley said she told Transportation Secretary Robert J. St. Onge, a retired Army major general, to resolve the matter quickly and make sure it doesn't happen again.

"He told us he was going to make sure that he put provisions in place to make sure the contractors did get paid and that we would stay on a 30-day schedule," Haley said after the meeting. "Any sort of delay paying contractors is unacceptable, and General Bob knows that."

In the meantime, St. Onge said DOT is working with contractors on an individual basis to work out payment schedules that won't harm the businesses.

Loftis and Haley clashed earlier this year. In February, the governor's chief of staff, Tim Pearson, said Loftis wasn't a relevant player in budget discussions with legislators, according to a letter obtained by The Associated Press.

Pearson's comments were in response to Loftis' concerns about being excluded from a meeting with House and Senate budget writers.