Last month, Sanford vetoed $25 million in the 2010-11 state budget that funded the board, essentially killing it as falling tax revenues made available money almost non-existent.

Then this month, Sanford cleared the way for the board to tap into a one-time, $13 million chunk of cash originally dedicated to projects as part of the state’s Rural Infrastructure Bank. That infusion of could be used to help the board limp along until a permanent solution could be found to keep the board alive.

But now comes knowledge that the money Sanford tabbed for the board may be off-limits and subject to a nasty lawsuit. In fact, the money is from a trust fund the governor actually attempted to veto, but was overridden.

So what gives? Are these mixed messages, or is the governor laying the groundwork for a most lasting legacy than his trip to South America: the creation of an executive branch-run Department of Administration?

Hard feelings

Sanford has never had the best relationship with the board, which he chairs and his comprised of the state treasurer, the comptroller general, the chair of the Senate Finance Committee and the chair of the House Ways and Means Committee.

Early in his tenure, Sanford made the board, which oversees major chunks of the state’s budget and spending, a political target of his campaign to reshape state government into a more executive branch-friendly model. 

The board allows the state government to be arguably more proactive than other states in changing economic times, making it easier for state government to curb or accelerate spending in light of fluid tax revenue collections.

Other states without similar boards have found themselves in standoffs between the executive and legislative branches over what to do about mid-year cuts or adjustments. As a result, South Carolina has enjoyed higher credit ratings, and resultant lower loan payments, from credit analysts despite the state’s comparatively low per capita income levels.

Sanford’s enmity with the budget board seemed to intensify once Thomas Ravenel resigned as treasurer in the face of drug charges. With Ravenel on board, it was a de facto extension of the Sanford’s will, as the former treasurer and fellow fiscal conservative Comptroller General Richard Eckstrom could team with Sanford for an unbeatable 3-2 voting bloc.

But with Ravenel in the hoosegow and later treatment, and former legislator turned Treasurer Converse Chellis in office, Sanford saw his grip on the Budget and Control Board slip away.

Surprise, surprise, surprise

There was probably no one in the Statehouse more surprised than Sanford when the House led the way last month sustaining his veto of the Budget and Control Board, according to state Sen. Brad Hutto (D-Orangeburg).

Hutto said no one expected the House, spurred by Democrats angry enough over health cuts, to sustain that veto. And as a result, Sanford, mindful of the financial advantage the board gives the state, scrambled to find some money.

But the money Sanford found had strings attached all over it. One, Sanford had vetoed the rural infrastructure trust fund earlier in the session, only to see it overturned.

Two, the money in the trust fund was dedicated money, money that the legislature wanted to go to help build sewer and other projects to help rural parts of the state attract business and industry and jobs.

Three, the last time the legislature raided trust funds in a similar fashion following the last recession, Sanford criticized the move until the legislature agreed in 2003-04 to replace the money it had moved around from dedicated sources.

Sanford, it seemed, has continued to struggle with the idea that, in state government budgeting, a dollar isn’t always a dollar – and sometimes that dollar has already been dedicated (read: spent) before the state ever gets it.

Chellis said that, as much as Sanford wanted to, he just can’t run government like a business, and needed to heed its procedures.

Hobson’s choice

This puts legislators like Hutto in a tough spot.  If he fights the “raiding” of the fund, which the board holds in reserve until a project looms, then the state loses the Budget and Control Board.

Or, if nothing is done, jobs in rural areas like Bamberg and Orangeburg, and other parts of Hutto’s district go under-served.

So which is more important to the state, protecting the sanctity of trust funds or preserving the Budget and Control Board?

Chellis said this week that trusts must come first, otherwise the state could lose out even bigger with credit companies like Standard and Poor’s, and Moody’s, which are already not impressed by the end-of-year deficits the state has run the past three years running.

Hutto said work is being done to attack the money switch in court, but declined to say which county or municipality it will be. He sided with Chellis, saying the trust in trusts must be preserved. Otherwise the precedent could have bad repercussions for the state.

Where’s Waldo?

Ben Fox, Sanford’s spokesman, said this week that “the fund the board is tapping has not expended any money to rural counties since its inception, so I'm confused as to all the economic development Senator Hutto and others have claimed it has created or is creating.”

Second, Fox said that board staff pointed out in last week's meeting, “This fund is not officially designated as ‘restricted’ and falls clearly under the flexibility proviso, and is therefore not requiring of legislative approval.”

Calling the Rural Infrastructure Bank a “dormant and unused fund,” Fox said his boss had more success supplying jobs and expansion in rural areas via his cabinet agency Department of Commerce’s Rural Infrastructure Fund, which, he said “has delivered $20.45M over the last five years” to various important projects.

Crystal ball: Someone will sue and Sanford will lose. Or will he? If the $13 million gets cut off, then the Budget and Control Board dies -- and with it, some of the legislature’s hegemony. This could clear the way for an executive-run Department of Administration, which could look rosier to the General Assembly with a different governor in office. Or the legislature could pounce the first week back in session in January and fund the board separately.

Some have said that the selection of unknown Alvin Greene, who is facing a felony obscenity charge, as the party’s candidate to contest incumbent U.S. Sen. Jim DeMint (R-S.C.) in the November election, was the final straw. Fowler has said she never intended to serve more than two terms.

Greene was not Fowler’s first embarrassment. Two years ago, an eleventh-hour convert to the party ran a Republican-friendly campaign against seated U.S. Sen. Lindsey Graham. In each case, Fowler said she couldn’t control who ran. To some, that was exactly the point. One Democratic Party member, speaking on anonymity, said the problem with the party was bigger than Greene’s nomination: “The problem is that no one is saying, ‘these candidates suck’ before it’s too late.”

JULY 9, 2010 -- South Carolina’s legislative culture was such a mess of gifts, money and corruption 20 years ago that it spawned a huge FBI sting called Operation Lost Trust. 

Caught in the vote-buying scandal were 28 legislators, lobbyists and insiders, all but one of whom were convicted on bribery, extortion or drug charges.

By 1992, state lawmakers tightened South Carolina’s ethics laws to restrict lobbyists’ use of money as a political tool. No longer could they pay for fancy free trips to golf courses or the Super Bowl. In fact, the new law made it illegal for them to give any campaign contributions or even buy a lawmaker a cup of coffee.

“I’ve had lobbyists 20 years later come and thank me because they felt they were getting extorted,” said E. Bart Daniel, a Charleston lawyer who served as U.S. attorney and top prosecutor in the Lost Trust cases.

Today, there’s more accountability in the system thanks to better disclosure requirements for campaign contributions. But as Common Cause director John Crangle notes, the legislative culture at the Statehouse remains mired in money. Now, things are less flamboyant, less in your face.

“I call it ‘Operation Misplaced Trust’ because there’s sort of an illusion that the ethics act that passed in 1992 cured a lot of the problems,” Crangle said. “In retrospect, the problem has gotten worse in the last 20 years. The magnitude of the money has increased dramatically. The methodology that is being used by big money interest has changed.”

By S.C. Sen. John C. Land, III

JULY 9, 2010 -- The 2010 Legislative session recently came to a close. And once again the Republican agenda was heavy on rhetoric and light on substance. While Republicans were expending political capital on a meaningless resolution on our state’s sovereignty and fighting to dismantle the Voting Rights Act, Democrats went about the business of getting real results for the citizens of South Carolina.

Democrats are proud of the substantive legislation that passed this year, legislation that will have an impact on our state’s physical health and economic health.

Topping the list was the final passage of an increase in the state’s cigarette tax. After a ten year struggle, South Carolina no longer has the lowest in the nation cigarette tax. Beginning this month, we will now have a source of revenue to fund our state’s critical health care needs. With a three-to-one match of federal dollars, this will have a potential half a billion dollar impact on our state’s economy.

In addition to creating a source of funding for our state health care needs, the General Assembly passed “Michelle’s Law” this session. Michelle’s Law will safeguard dependent children who have a medically related leave of absence from college from having their insurance coverage dropped. South Carolina students no longer have to face a choice between college or health insurance.

South Carolina’s economic health was addressed this session. The state agency responsible for unemployment benefits and job placement was overhauled this session. Now a Cabinet-level agency, the new department has greater flexibility and more accountability to the Governor. The Department of Employment and Workforce will work to develop recommendations for the financial stability of the Unemployment Insurance Trust Fund and matching unemployed citizens with jobs.

Comprehensive tax reform efforts continued, as well. The Tax Realignment Commission (TRAC) is set to issue their report this November. The board has been tasked with developing recommendations for reforming the state’s tax structure.

Our state’s criminal justice system received a much needed overhaul this session. Sen. Gerald Malloy (D-Hartsville) led the effort for sentencing reform. The measure is designed to bring a more common-sense approach to sentencing non-violent, first-time offenders, end discrepancies in drug convictions, and save the tax payers $400 million dollars over the next 5 years in correctional expenses.

Democrats also stood up for open and fair access to the ballot box this year by fending off a Republican led effort to disenfranchise over 170,000 voters in South Carolina. The so-called Voter ID bill was a solution to a problem that doesn’t exist in our state. Our state has a long history of denying people access to the voting booth. We’ve come a long way from the days of poll taxes and literacy test. Unfortunately, the Republicans in the legislature made it a top priority to turn back the clock. Democrats were proud to block this effort and keep the ballot box open.

The citizens of South Carolina deserve to have representatives whose top priority is making our state a better place to live, work and raise a family. But some Republican members of the General Assembly are more focused on petty political gamesmanship and partisan pandering than moving our state forward. Democrats will continue to push for the real substantive change our state needs.

State Sen. John C. Land III of Manning is the Democratic leader in the South Carolina Senate.

To Statehouse Report:

Thanks so much for your column regarding "pick up their trash." [Commentary, 7/2]

I am so sick and tired of this crap being allowed to continue. What is the problem? Is it illegal or not? I live in Florence but travel much of the state and what I see on the roadside is sickening. Get rid of all of these signs including the ones that try to sell you anything from insurance to radiators.

If everyone that had a product to sell were allowed to do this, imagine what our roads would look like. As for Alan Wilson, as well as Jim Clyburn, they need clean their mess up, I'm tired of looking at it. I pick up these signs myself when I can. Come on South Carolina, clean this mess up, enforce the law, or is this considered legal litter?

-- David Baker, Florence, S.C.

 

NEED TO VENT?  Or mad about something we wrote? Send us a letter to the editor and we'll print it (as long as it isn't libelous!). Please include your name and town for identification purposes.  Send up to 200 words to feedback@statehousereport.com.

Haley. Garners POSITIVE national attention for South Carolina.  More.