Gov. Mark Sanford was peppered with questions from Rotary Club members and their guests about his insistence that $700 million in federal stimulus funds should be used to pay down the state's debt rather than on public education and law enforcement as intended.
Sanford spoke for about 20 minutes and took questions for nearly a half hour. Before taking questions, he laid out his position using a series of charts and graphs that he said illustrates South Carolina's bleak financial situation. He said the state continues to rack up debt while trying to keep up with the cost of funding schools and paying retirement benefits to S.C. employees at a time when the state's revenues are in steep decline.
Using the stimulus money to pay the bills instead of reducing debt and spending just defers the problem, the governor said.
"Think about it this way," Sanford said. "If you won the lottery tomorrow, would you be viewed as prudent to set some away for a rainy day? [The stimulus money] is the lottery of all lotteries. And if you won the lottery, most prudent families would set some money aside to pay down their credit cards, they'd set some aside to pay down their mortgage and I don't know why, if that's prudent for an individual and if that's prudent for businesses, why would it not be prudent for government?"
The governor said "a full 11 percent" of S.C.'s budget is spent on debt each year and said he's worried about how much more debt the state can sustain before the recession bottoms out and economic recovery begins.
"In these types of financial times...what if this lasts longer than 24 months? If we're $25 million in the hole, then what?"
Most of the questions Sanford fielded from the Rotary audience were about the $700 million – a portion of more than $3 billion in federal aid to South Carolina – and whether or not he believes paying down the debt is more important than adequately funding schools. Some audience members openly expressed the fear that local schools – what many consider Fort Mill's greatest asset – will suffer if forced to operate with less money.
Fort Mill School District Superintendent Keith Callicutt, who said Fort Mill "is unique because it's the fast-growing school district in South Carolina," told the governor he's facing a budget cut he expects to be somewhere between $2.5 million and $5 million without an infusion of stimulus cash.
"I worry because we may be arguing over a decision that's already made," Callicutt said. "I don't think throwing money at education is the answer [the state's economic problems]. However, equitable spending on education is important in this school district. The people in this room enjoy a quality if life and a lifestyle they strove for was based on the quality of the school system."
Sanford answered that he signed into law Tuesday a bill that aids school districts by allowing greater flexibility in spending and grants districts the authority to suspend some mandated programs. In answering another question about the stimulus money, the governor, a Republican, said he wanted to dispel misconceptions he blamed on ads sponsored by the Democratic National Committee –- "to scare the bejeezus out of everybody" -- that the stimulus money earmarked for South Carolina would go to other states if it's not claimed and allocated soon, resulting in massive teacher layoffs.
"That money is allocated to South Carolina and can't fly off to California or New Jersey," he said.
One terse question came from Guynn Savage, a local real estate consultant and former Fort Mill Town Council member. She noted that Fort Mill’s growth and prosperity were a product of having the highest-rated schools in the state and wondered what would happen “if we don’t take [the stimulus] money and invest it in the education of our children and bring jobs to South Carolina. I would like to keep them here.”
Sanford said, "I hear where you're coming from," he replied "but I don't think these stimulus checks are the key to South Carolina's recovery."
Later, Savage talked about the response the governor gave to her question and others: "He didn't answer any of the questions," she said. "But, he did get a lot of feedback from local people and hopefully that will make a difference."
Savage also said all the national attention Sanford is directing to South Carolina with the controversy over the $700 million is bad public relations.
"Would you want to relocate your business here after hearing about this?" she said.
After he was through taking questions, Sanford took a seat and stayed for the remainder of the Rotary meeting, at one point cracking jokes with some members, including one who said he wanted to contribute one of the club's "Happy Dollars" to stimulus relief.
After the meeting, he stayed to pose for photos with Rotary club members and guests. He also spent a few minutes talking with the Fort Mill Times. In that brief session, the governor was asked about the state’s legal battle with North Carolina over the Catawba River.
Asked if funding a lawsuit to keep North Carolina from drawing water from the river without any controls or input from South Carolina is still a priority given S.C.’s fiscal woes, Sanford said, “it’s a very important issue and we have allocated funds for Attorney General [Henry] McMaster to protect South Carolina’s interests.”
Sanford said, “we tried to come to an agreement with North Carolina to keep it out of court. Water rights have long been an issue on the west coast and now it’s going to increasingly be an issue on the east coast.”
Other questions, comments
Sanford was asked (by the Fort Mill Times) how the state plans to keep up with applications for unemployment benefits and if the state has any other role in helping residents who are unable to find work make it through the recession.
His answer was that the S.C. Employment Security Commission should be made part of the governor’s Cabinet. State lawmakers are considering a plan to make that move by creating a new Workforce Department.
On possible federal legislation that will make it easier for workers to form unions simply by having a majority sign union cards rather than hold company-wide votes (South Carolina is a "right to work" state):
Sanford said "If card check passes in Washington, D.C., it will undo anything the stimulus package does."
The governor is accused of "playing chicken" with the Obama administration over the stimulus funds.
Sanford stressed several times that the state has accepted "90 percent" of the money in the package and did hint at one point Wednesday that he's open to some sort of a compromise over the $700 million in question.
One audience member, York County Councilman Paul Lindemann, (R-Fort Mill) said after the meeting, "there's resentment toward the governor, but he's done a good job to this point with 90 percent of the money. I'm on the [Rock Hill-Fort Mill Area Transportation Study] committee and we were told all shovel-ready projects will be funded."
Another official in the standing room only crowd, State Senator Mick Mulvaney (R-Indian Land), said he understands Sanford's intent, but also empathizes with residents concerned about school funding. "Whatever the amount is, we have to pay for it," he said.
"That's why my solution is tax relief. It's really two sides of the same coin. That's why I'd like to see relief in the form of a tax credit."