Looking for pressure pointsSanford may seek to grow 'Juicebox Caucus," moreBy Bill Davis, senior editor APRIL 17, 2009 -- Concern rose in some quarters of the Statehouse this week that Gov. Mark Sanford, looking for better footing in the shifting sand of the $700 million stimulus fund debate, may seek to hijack the fight to increase the state’s cigarette tax.
 Recently, Sanford said he was looking for some more friends in the Senate. That’s understandable, according to Senate Democratic Caucus spokesperson Phil Bailey, because the number of senators needed to block a bill or support a gubernatorial veto is much lower than in the more fractious House.
It would take only 15 senators to block a veto override vote in the Senate. And with an unstoppable veto in hand, Sanford could threaten to block raising the state’s per-pack cigarette tax from 7 to 57 cents.
At $150 million in expected extra revenue, the cigarette tax increase has been an especially shiny object in the eyes of the cash-starved legislature, which has seen its annual budgets drop by more than a billion dollars in the last year and a half.
Will it work?
With that kind of power, Sanford could apply more pressure on the Senate and the House to come to the table and strike a compromise on how to address the remaining $700 million in federal stimulus money Sanford has not completely received from the Obama Administration.
 Sanford has threatened to tie up getting the money until the General Assembly agreed to make significant cuts in spending and using a portion of that money, at least, to pay down state debt. [See columnist Andy Brack’s view below on “state debt.] Many in the legislature want to use that money now, with the remaining $700 million chunk to keep teachers in classrooms and troopers on the highway for the next two years.
“I don’t think Sanford could sustain a veto on this in the House,” said Greg Foster, communications director for Speaker of the House Bobby Harrell (R-Charleston). “Because the version we passed over to the Senate earlier this year was revenue neutral.”
Sanford had said previously he would veto any cigarette tax increase that wasn’t revenue neutral, where revenues would be offset by cuts in other areas of the budget. Harrell concurred and championed the House version that sets aside the money in tax credits for smaller companies that offer private healthcare insurance coverage to more employees.
Members of the new caucus
Currently, there are a baker’s dozen of senators the governor can probably count on, the so-called Republican “Juicebox Caucus,” named in joking reference to its members’ ability to swallow Sanford’s philosophical and political Kool-Aid.
 The first four are considered the most loyal of those loyal to Sanford: Tom Davis of Beaufort, Greg Ryberg of Aiken, Chip Campsen of Charleston, and Kevin Bryant of Anderson. The next five are members of the freshman class, and received some help or support from Sanford in their bids: Mick Mulvaney of Indian Land, Paul Shoopman of Grier, Shane Martin of Spartanburg, Michael Rose of Summerville in his second stint in the Senate, and Lee Bright from Roebuck.
And the remaining four usually side with the governor, but show a more independent streak than the loyalists: David Thomas of Greenville, Danny Verdin, the head of the Ag. Committee, of Laurens, Mike Fair, also of Greenville, and Larry Grooms of Bonneau.
Bailey, reviewing the list, said, “Yep, those are the names I’ve got.”
But that list was also three senators short of securing a gubernatorial veto. And some of those senators already on the list weren’t ironclad on his side earlier this week.
Both frosh senators Shoopman and Mulvaney, standing to the side and just listening at the Tea Party anti-tax protest Wednesday led by the governor, said they were open to an increase if it made sense once they read whatever version emerged from committee.
Mulvaney, whose two-county district shadows the North Carolina state line, said he wouldn’t support any bill that raised the per-pack tax more than 50 cents.
Shoopman said that he opposed “targeted tax hikes in general,” like the cigarette tax, but that he, too, was open to see what emerged from subcommittee. He also worried that the bill would bring in less and less money as more and more smokers were priced out of the market, and that would create unfunded mandates as the tax revenues plummeted.
Bryant, who prayed for the “wisdom of Solomon” during a Senate Finance Committee budget debate, said he would have to look at the bill first, but added he also disliked targeted taxes.
So, Sanford’s Juicebox Caucus isn’t leak-proof, with some “members’ wavering, at least initially, and three more names needed.
“I don’t think he can do it in the Senate,” said President Pro Tempore of the Senate, Glenn McConnell (R-Charleston).
Crystal ball. Sanford will try and he will likely fail. Will he reverse course and veto a bill that meets his revenue neutral requirement? Probably. Don’t forget last year when after the Senate gave him the illegal immigration reform bill they thought he wanted, he waited until they were out of town to criticize it for not going far enough. But will he raise enough of a stink to let the legislature know he means business on linking the $700 million stimulus chunk to the $150 million cigarette tax increase? Depends on how intractable he’s feeling. That day.
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Busy week aheadWith the House back after a two-week vacat … er … furlough, the action will shift to its agenda in the upcoming weeks. Members of both chambers will meet Thursday at 2:30 p.m. or 30 minutes after the Senate adjourns in 308 Gressette for a joint Sentencing Reform Commission meeting.
In the House
Tuesday
3M. The full committee will meet at 2:30 p.m. or 30 minutes after adjournment of the House in 427 Blatt to discuss a variety of issues.
LCI. The full committee will meet at 3 p.m. in 403 Blatt to discuss the adoption of the Energy Standards Act, among others.
Ag. A subcommittee will discuss whether to include nuclear and coal power as part of the state’s definition of renewable energy sources at 3:30 p.m. in 410 Blatt.
Wednesday
Ag. The full committee will meet at 8:30 a.m. in 410 Blatt to discuss a full agenda, which includes bills dealing with wildlife management areas, hunting laws and biodiesel.
Judiciary. A subcommittee will meet at 9 a.m. 411 Blatt to discuss a law concerning electronic filings in state elections.
Ed. The full committee will meet an hour and a half after adjournment in 433 Blatt to discuss a raft if issues, including bills pertaining to license plates, the gross weight of vehicles allowed on state roads and others.
In the Senate
Tuesday
Ag. A subcommittee debating requiring permits for surface water draw-downs will meet at 9 a.m. in 308 Gressette.
Wednesday
Banking. The full committee will meet at 9 a.m. in 308 Gressette to discuss a host of bills, including ones dealing with S.C. HealthNet to the Life Settlements Act.
Thursday
3M. A subcommittee will consider a bill that would require an autopsy to be done on written request of the family of a person who died in a hospital. The meeting is scheduled for 9 a.m. in 427 Blatt.
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Compromise on horizon?
Stalwart ally and former chief of staff to Gov. Mark Sanford, state Sen. Tom Davis (R-Beaufort) this week offered what appeared to be an olive branch to the Senate Finance Committee, which then took the branch and whupped him with it.
Davis presented a funding scenario to the committee he and fellow Sanfordite Sen. Greg Ryberg (R-Aiken) researched where the Department of Health and Human Services’ operating budget would be absorbed totally into the General Fund to give the legislature some financial flexibility in the face of lowered tax revenues.
Committee Chairman Hugh Leatherman (R-Florence), as staunchly anti-Sanford as Davis is supportive, delivered most of the blows. Leatherman’s best lick came when pointed out that the scenario had no promise from the governor that he would honor the deal, nor was there any assurance that the people needing services from DHHS would actually be served as they have been in the past by the state.
Davis acquiesced as much, but added he saw the plan as a compromise and the first step along the way to breaking the “logjam” that existed between the Statehouse and the governor. Afterward, Davis was praised by several members of the committee and observers for taking his whuppin’ like a man and remaining respectful of the committee. While it showed Davis will probably have a successful political post-Sanford career, it also showed, more importantly, that the Sanford camp may at least moving in a more collegial direction for the near future.
Bill Watch
With the May 1 crossover deadline looming, the day the Senate and the House can still pass bills over to the other chamber without a two-thirds majority, the list of bills that will be dealt with this year is shrinking. But because 2009 is the first of a two-year session, many of the bills not dealt with by the time the legislature adjourns will live again next year.
With the House on its second consecutive week of furlough, all of the action remained again in the Senate last week, where payday lending moved out onto the floor and will take up whatever time next week that won’t be consumed by the budget debate. Expected to join payday lending will be the reform of the Employment Security Commission.
In the House, the Tax Realignment Commission is getting a push to be completed in the next week or two, and with the Ways and Means Committee having passed a small business red tape reduction bill before the furlough, it, too, will likely hit the floor in the coming weeks. But a lot of time will be spent in the House waiting, because representatives passed over so many bills to the Senate, like the one increasing the General Reserve Fund from 3 to 5 percent (approx. $100 million).
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Budget looms largeThe state’s Senate Finance Committee voted Thursday to approve a proposed $5.7 billion state budget for the upcoming fiscal year, 2009-10. The proposed budget moves to the floor next week.
The House sent its version to the Senate last month, but with a very different bottom line ($6.6 billion) because it dealt differently with the federal stimulus funds. The Senate version also includes deeper agency cuts.
The full Senate will debate the budget beginning next week. Once it has approved its version, it will be sent back to the House, and eventually to a conference committee between the two chambers before being sent to the governor. If the past is any indicator, observers say Sanford might veto the whole thing or parts of it. After that, the General Assembly would have to deal with any vetoes.
Tea party animals
More than 10,000 South Carolinians took part in tax day protests across the state on Wednesday, April 15. The largest came in Columbia on the front steps of the Statehouse, where a reported crowd of 3,000 stood and cheered as speakers like Gov. Mark Sanford and U.S. Sen. Jim DeMint (R-S.C.) exhorted the crowd.
That Columbia protest provided many in the state an opportunity to express concern and disdain for government spending, namely the $787 billion federal stimulus package, and also served as a rallying point for a loose collection of conservative issues, like school voucher and opposition to “big government.”
Participants were told by various speakers that they were American heroes for opposing tax increases in much the same way patriots were who dumped tea into Boston’s harbor in this country’s formative years. Rhetoric was a little testier in the crowd, where participants carried signs emblazoned with messages like “Don’t Tax Me, Bro,” and “Public Schools Harm Children.”
In a related story today, pro-education advocates today held a kind of anti-tea party in Greenville exhorting Sanford to take the stimulus money. More.
Lesson learned
The next time a tea party is planned for the steps, may we make this suggestion?
Do not walk into that charged element with your press card hanging from the outside of your blazer as you walk around with your notebook and pen. Someone like a little old lady will call you a “terrorist.” To your face. Ahh, those South Carolina grandmothers.
Stimulus lawsuit filed
Democratic lobbyist/lawyer Dwight Drake filed a lawsuit this week on behalf of a Chapin High honor student to force Gov. Mark Sanford to accept the remaining $700 million slice of the federal stimulus package. Sanford has requested the money, but doesn’t have to accept it for up to two years.
Drake, assisted by former S.C. Democratic Party chairman Dick Harpootlian, filed the lawsuit with the S.C. Supreme Court, which may take up the case as early as next week. But first, S.C. Attorney General Henry McMaster is expected to respond to the pleadings in the case.
This is not the first time a state student has been at the center of the debate for educational improvement. TySheoma Bethea, a Dillon-area junior high school student, sat next to First Lady Michelle Obama at a joint presidential address to Congress earlier this year after she wrote President Obama for help fixing her crumbling school.
The Chapin High student, Casey Edwards, attended the state Governor’s school last year where she watched “Corridor of Shame,” a video that stirred her to lead fund-raising efforts to support other schools. Edwards has since become a co-chair of a committee pushing the online petition, www.GoodbyeMinimallyAdequate.com. A press release issued by Sanford’s office called Drake a well-heeled lobbyist who has represented the video poker lobby and that the lawsuit was a “politically-driven press spectacle.”
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Using numbers to mislead taxpayersBy Andy Brack, editor and publisher
APRIL 17, 2009 – It’s not uncommon to hear in politics how you can twist numbers to prove just about anything.
 That may be part of what’s happening in the continuing debate over whether South Carolina will accept $700 million in federal stimulus money. Gov. Mark Sanford steadfastly maintains that the money shouldn’t be used for anything other than paying down the state’s debt.
For many, this might sound reasonable because they might believe the state, like the federal government, has a huge debt that looms over it like a bad alien spaceship.
But is that a reasonable assumption? Especially if you consider the fact that South Carolina, unlike the federal government, is required every year to have a balanced budget?
Hmmm, you might now think, a more reasonable question might be, “What debt do we really have if we have to balance the budget every year?”
 And so we head into an exciting discussion of government financing. Seems as if there is “good debt,” “bad debt” and “other debt.”
“Good debt” is similar to having a mortgage: you borrow money knowingly so you can buy a house. In borrowing a large pile and paying it off over time through a mortgage payment, you are able to purchase a home. Otherwise, it would take years to save enough to buy the home outright. It’s “good debt” because it gives you home ownership now, instead of years down the road, and provides you with tax advantages and all sorts of other benefits.
At the state level, such “good debt” is manifest in bonds the state uses to get money now for big investment projects, such as millions to upgrade school classrooms, entice large industries to locate or make major capital improvements. Like a mortgage, the state intentionally takes on the burden of borrowing a bunch now so it can do things that are needed and it pays off the debt over time – usually in around 15 years.
Right now, South Carolina has about $2 billion in “good debt” from general obligation bonds, according to the State Treasurer’s office. Because the General Assembly has approved few bonds in recent years, the state will pay off half of the bond indebtedness in the next five years. In 10 years, only 10 percent of the today’s $2 billion debt will remain on the books.
“Bad debt” for the state, like a family, occurs when more is owed than can be managed. Unlike families who are “upside down” in their mortgages in the current national economic crisis and owe more than they can service, the state essentially has no bad debt because it is required to balance its budget every year.
“We’ve got two AAA credit ratings and one AA+ credit rating from the three top credit agencies in New York,” State Treasurer’s office spokesman Scott Malyerck points out. “If we had bad debt, we wouldn’t have these high ratings… .It’s easy to confuse people when you talk about debt numbers.”
So when Sanford throws around numbers that the state owes $14 billion, not the $2 billion that most budget folks discuss, what’s going on?
 “The balance of that is $12 billion and it’s all kind of debt,” noted State Treasurer Converse Chellis. “But it’s all assigned to some kind of revenue stream that has nothing to do with the General Obligation bonds we have.
“He’s kind of mixing oil and water and not sticking to the facts in the process.”
Ahh, imagine that – a politician using numbers for his own convenience.
The $12 billion that the state “owes” is “other debt” because the taxpayer isn’t directly on the hook for the money. It is borrowing incurred on behalf of the state that is paid for through dedicated revenue streams – fees, essentially. Three examples:
South Carolina owes $3.4 billion in bonds issued to pay for utility improvements through Santee Cooper. Who pays the debt? Ratepayers through utility revenues, not South Carolina taxpayers.
There’s $1 billion owed in Education Assistance Authority Bonds, which are used for student loans. The debt is serviced through student loan payments.
The State Ports Authority owes $133 million in bonds, which are paid by fees charged by the port.
Bottom line: Governor Sanford is trying to win his stimulus argument by scaring South Carolinians into thinking there is a large amount of bad debt out there when there really is none.
Why? Suggests Chellis: “He has a different agenda, maybe, for himself.”
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Education being bullied by Choice CultBy William C. Heitsman
Special to SC Statehouse Report
APRIL 17, 2009 – State Sen. Kevin Bryant’s latest missive on the evils of public education (The State, 4/13/09) has chosen ignore a fact or two in his proposal to turn the children of South Carolina over to Howard Rich and his Choice Cult.
The first fact that Bryant chooses to ignore is that historically agriculture and business leaders have deliberately chosen to keep many parents and children of South Carolina ignorant of the benefits of education. This meant they could keep wages low and civil rights nonexistent.
The second fact Mr. Bryant chooses to ignore is basic economics. Whenever you increase or put a large amount of cash into an economic good or service the price increases approximately the same amount as the increase. It’s called inflation.
The recent refusal of the money for education by Governor Sanford indicates that education or the rule of law is not a concern for the governor. Mr. Bryant’s willingness and leadership in opposing attempts to overturn the governor shows he shares the governor’s priorities … or of lack of them.
Governor Sanford is neither an Icon of conservative virtues. Sanford is a bully -- a bully picking on the children of South Carolina and Republican legislative leaders. He is trying to punish legislators, teachers and administrators who oppose his plans to turn education over to Howard Rich and the School Choice Cult.
He may succeed because the people of South Carolina are still willing to fall under the spell of the governor, Howard Rich, the School Choice Cult and the different responsibility groups who infect the airwaves with their side of the story .
Mr. Heitsman is a retired school teacher who lives in Darlington, S.C.
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Up, down and in-between BEA. For the first time in what seemed like a millennia, the state Board of Economic Advisors adjourned its meeting this week without calling for any more mid-year state budget cuts. In fact, state revenues are $37 million ahead of projections thanks to some good audit work done by the Department of Revenue, according to a BEA source.
Drought. While the state hasn’t fully recovered, and the state climatologist said we need to remain alert, the Upstate’s drought status has finally been downgraded from extreme to moderate. More: Greenville News.
The ladies. Two of the three candidates selected to be chosen from for a spot on the state Supreme Court are women. More: Greenville News.
 Tea Parties. It’s great that so many South Carolinians feel so passionately about politics. It’s a shame that the crowd at Wednesday’s tea party on the steps of the Statehouse was so monochromatic. It could be said that it was one of the few days there were more black faces inside the Statehouse than outside of it.
Unemployment numbers. They keep going up, thanks to more in the job market. Arg. Fortunately, the actual number of people with jobs is higher than last month.
 BB&T. CEO John Allison told USC business majors this week that the federal government and “people like” Massachusetts Democratic Congressman Barney Frank were to blame for the nation’s economic trouble, apparently forgetting the role bankers like himself played in creating highly risky investment products like credit default swaps which ended up creating tens of billions of dollars of debt in the world economy. More: Spartanburg Herald-Journal.
Bauer. How bad does Lt. Gov. Andre Bauer want to governor in 2010? Enough to hire a Swiftboat Veterans for Truth campaign veteran consultant to his campaign staff. Say, can Atwater be reanimated? More: The State.
Santee Cooper. Boy, this smells to high heaven. Now on the defensive about a new coal-fired power plant for the Pee Dee, the utility now whines that it really would prefer not to build the plant (despite millions spent so far encouraging support for it). But (it says), it sees no other alternatives. A new kind of Horatio Alger story? More: Post and Courier.
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