With House Republicans splintered into mainstream, anti-abortion and Tea Party factions, and House Democrats ready to fight any attempts to further cut social services out of the state’s General Fund budget for the 2010-11 fiscal year, Sanford may hold the ultimate political trump card.

The gubernatorial veto.

On Thursday, with 15 minutes to spare before this year’s legislative session was set to end, the Senate concurred on the House conference committee report on the state’s $5.1 billion General Fund budget.

What happened

The late-hour move started in the House, where GOP leaders convinced members of its anti-abortion caucus to relent on language in the budget that, borrowing from the Senate’s version, would allow for women covered under the state’s health insurance policy to be covered for abortions in cases of rape, incest and danger to the mother.

Additionally, this year’s sine die resolution, which sets the calendar and agenda for when the legislature returns to Columbia to deal with expected gubernatorial budget vetoes, was expanded to include tackling a separate conference committee report regarding a bill 24-hour waiting period for women seeking an abortion after they’ve seen an ultrasound of the fetus.

With those two moves in the House and all the accompanying arm-twisting said to have gone on behind closed doors, the way was paved for the legislature to avoid extending the session and a lame finish after a sessions-worth of accomplishments.

Had the two chambers not agreed on the budget package, then the year could have devolved into a situation this year where the legislature passed everything but the budget – the exact opposite of the 2009 session, when it seemed the only thing the legislature passed of worth was the budget.

Banner year

Compared to the bare shelves of last year, 2010 brought many trophies to the legislature.

The General Assembly attacked and passed several important issues. One key success was raising the state’s cigarette tax from 7 cents a pack to 57 cents per pack. The General Assembly this year also overhauled the state’s unemployment agency, implementing structural and leadership changes in how the agency will be run.

And, with Sanford’s signing off this week, it passed what many say may be the best bill of the session -- reforming sentencing guidelines to divert non-violent first-time offenders into cheaper diversion programs while reserving more beds for more hardened and dangerous criminals.

Sanford back at top

So with a legislature carrying such a head of steam, how did Sanford clamber back on top? It’s complicated.

A few weeks ago, the House Democratic Caucus sustained a Sanford veto of a GOP-backed plan to fund the state’s cash-strapped court system with the fines and fees it generates instead of putting the money back into the General Fund and having it parsed out to all corners of the state’s agencies and departments.

The House Republican leadership responded by delivering major cuts to several social services programs Democrats have traditionally held dear, especially in health care. This led to a budget showdown this week between mainline Republicans in the House and their Democratic colleagues .

Progressing at the same time was the rift between mainline House Republicans and Tea Party hardliners and anti-abortionists. A fractured House, pitting conservative factions and the Democrats against the mainline GOP, generated an opportunity for Sanford to step and deliver a massive blow via his veto power.

Vetoes expected, but unknown

It’s not known whether Sanford will issue single veto, shooting down the entire budget as he did once in the past, and force both sides to come to the table to rework the entire budget to his liking.

It’s also not known whether Sanford will attack the budget in a piecemeal fashion. 

This is an important distinction, according to one House member speaking on condition of anonymity who’s been counting noses. If Sanford goes whole hog, said the legislator, then Republicans will be faced with a terrible choice: pleasing Democrats in an election year or pleasing Sanford.

Why? Because it takes a two-thirds vote to override a veto, and, according to the legislator, the mainline Republicans would then need the Democrats’ votes to push a budget through and past the governor’s office.

As a result, the manner in which Sanford wields his veto power may decide if the state will get a budget for next year the easy way. Or the hard way.

Crystal ball: What’s Sanford going to do? Ben Fox, the governor’s spokesperson, declined to comment this week about the governor’s veto plans. He pointed out that the governor has a lot of problems with past versions of the budget, which included demanding lower revenue expectations and more money pumped into rainy day funds. If the governor vetoes the entire budget, there is a distinct possibility that entirely new conference report will have to be drafted.

5/28: Haley, Sheheen atop new poll
5/21: Budget battle climaxing
5/14: The wait to fix school funding
5/7: Abortion fight for one senator

When the Senate adopted the House version of the budget conference committee report late Thursday afternoon, it put to bed a budget fight that had dominated the last regular week of the session.

Now, with a retooled sine die resolution, the General Assembly will return June 15 to handle expected gubernatorial budget vetoes, as well as remaining bills still stuck in conference committees, which include bills requiring women to wait 24 hours after seeing an ultrasound to have an abortion and a bill requiring voters to show some form of photo identification at the polls.

Bob Borden, big cheese at the state’s Retirement System Investment Commission, said this week that the state’s retirement pension fund’s value had rebounded, gaining $9 billion in value since last year, and was up over 33 percent since the previous year.

Borden, walking the halls of the Blatt Building this week, said the fund was now ranked in the top 15 percent nationally for large retirement funds, public or private. Borden had been under fire last year after receiving a sizable pay bonus after the fund had lost had dropped to $19.5 billion in March 2009 after peaking at $29 billion in 2008.

As precipitous a drop as that was, the fund, on the whole, out-performed the market’s huger drop, triggering Borden’s bonus. One of Borden’s critics was Gov. Mark Sanford, who grilled Borden last year at a Budget and Control Board meeting for projecting relatively healthy returns for this fiscal year, which ends this summer, after a disastrous 2009.

Well, Borden was more than right. His plan to squirrel-away cash to buy under-valued stocks and other investments has paid off handsomely.  And that’s good news for the tens of thousands of workers across the state who are enrolled in the state pension programs.

Budget succumbs to social issues

Word out of the Statehouse this week was that supporters of a 24-hour waiting period abortion bill got out of the way of a new conference report on the $5.1 billion budget in exchange for a promise that abortion will be a House Republican Caucus priority next year.

Democrats fought bitterly against the budget, throwing up last-minute roadblocks, joining with Tea Partiers and anti-abortion Republicans. Heightening the fight was the minority party’s representative on the budget conference committee, Rep. Bill Clyburn (D-Aiken), signing off on the original conference report only to vote against it on the floor. Now the budget goes to Gov. Mark Sanford, whose vetoes could have an enormous effect on the budget process. (See main story.)

Fickle politics

GOP Gubernatorial candidate state Rep. Nikki Haley (R-Lexington) went on the offensive this week, actively denying that she’d had a second alleged affair.

Larry Marchant, a lobbyist and a member of gubernatorial candidate Lt. Gov. Andre Bauer’s campaign team, came forward this week with a claim that he, too, had an inappropriate relationship with Haley. The week before, Will Folks, a former spokesman for Gov. Mark Sanford, alleged that he had had “inappropriate physical contact” with Haley.

Haley’s camp has cried shenanigans, saying both were purposeful, timed political smear tactics. Haley, who is married with kids, denied both claims and crafted a response TV ad to further refute the allegations.

Bauer, calling from his statewide bus tour stop in Aiken, declined comment when asked if Marchant was encouraged to come forward by his supporters. “The guy told me what he told me. I decided I didn’t want that to be part of my campaign, and that was that,” said Bauer, who said he’d take a lie detector test to answer those who have accused him of putting Marchant, a fund-raiser, up to a last-week desperation ploy.

JUNE 4, 2010 – If you think South Carolina’s been muddied by nasty politics recently in the gubernatorial race, just think how bad things will get if the state gets slimed with pollution from the Gulf oil disaster.

State officials say there’s only a slight chance that oil and tarballs will end up washing up on South Carolina beaches and in state marshes.

“In the process of moving through the Gulf stream, there is the potential that some [oil] may break off from the flow of the Gulf stream that could then eventually wash ashore,” said Thom Berry, a spokesman for the state Department of Health and Environmental Control. “While there is the possibility, the likelihood that we’re being told right now is low.”

For some reason, these reassurances ring hollow. Maybe it’s because every solution for fixing the Gulf gusher has failed so far despite public relations promises that each latest ploy would cap it. Maybe it’s because oil is starting to wash ashore, now in Florida. Maybe it’s because a third of Gulf fisheries are now closed. And maybe it’s because a new computer model shows spilled oil rounding the Florida peninsula and impacting the Atlantic seaboard this summer.

Berry says DHEC, which would be the lead state agency in dealing with any Gulf oil on state shores, is ready to coordinate the state’s response in the event of any problems. 

“We’ll throw everything we have at it,” he said, adding that the Coast Guard would provide the overall coordination for dealing with spill impacts.

Unfortunately, DHEC isn’t as strong as it was a few years ago. Just five years ago, the agency had about 6,000 employees. Now, it has about 3,700, Berry said. Just three years ago, its annual budget of state money was $147 million. In the just-passed budget for next year, it will have a little less than $82 million in state funding.

So for all of the people hollering about less government: You’ve got the government you want – leaner and with less muscle to deal with things like oil spills or poverty or poor health rankings or educational challenges.

Unfortunately, the very people who holler about less government and lower taxes are the same ones who now seem to be yelling the most for the government to do something about the spill.

Folks, ever heard of having your cake and eating it too? Your hypocrisy seems to know no bounds. 

Instead of falling for the Washington think-tank-inspired mantras of “less government” like simpletons, South Carolinians should be talking more about “effective government.”

South Carolinians currently pay far less in state and local taxes than most states - - and our governments are suffering for not having the resources they need.   The nonprofit Tax Foundation ranks South Carolina as having the nation’s 37th highest tax burden. Its most recent figures show South Carolinians paid 8.8 percent of incomes in state and local taxes, almost a full percentage point below the national average.

Despite South Carolina’s predilection to bellyache about taxes, perhaps a bright spot is around the corner. According to a May InsiderAdvantage/Statehouse Report poll, voters seem to understand that tough times demand tough choices.

They were asked: “State government faces a potential revenue shortfall of $1 billion next year. If you were king for a day, which of the following government functions would you prefer to lose hundreds of millions of dollars next year?” 

1.  The Department of Corrections, which would force closure of some prisons. Some 18.3 percent picked this choice.
2. Colleges and universities, which would have to increase tuition dramatically (15.3 percent).
3. Public schools, which would have to increase class sizes by at least 20 percent (12.2 percent).
4. Medicaid reimbursements to hospitals, doctors and nursing homes, which would cause some to go out of business (9 percent).
5. None. You can’t generate enough savings by cuts alone and would have to raise taxes some (45.2 percent).

Hmmm, so almost half of the 1,121 people polled said state government might have to raise taxes some to meet real needs. Perhaps now state legislators will pay attention --  and turn off anti-government venom in favor of providing the state with the resources it needs to be effective.

5/28:  Holleman, Nelsen, Lord, Chellis backed

5/21:  McMaster, Sheheen, Kitzman endorsed

5/14:  Advice for new college grads

5/7:   SC should pass on offshore drilling

By Jack Bass
Special to Statehouse Report

JUNE 4, 2010 -- There are developing signs that the popular perception of U.S. Sen. Jim DeMint being a shoo-in for reelection may be flawed. 

There's no doubt about the intensity of his core base, but the breadth of that base is another matter. Ardent admiration for him appears to have more depth than width.  Three recent polls show his approval rating in the 48-52 range, barely ahead of President Obama in the state.  Those surveys also indicate significant concern about DeMint’s seeming more focused on developing an ultra-conservative national movement rather than attention to issues and interests of South Carolina.  

Sentencing reform. Whew! Gov. Sanford just signed off on the bill that will save the state money, correct overly-aggressive “crack” laws, and save prison beds for harder criminals. Along with reforming the unemployment agency, this was a great move in your last year. More.