Print Page

Sanford challenges lawmakers to replenish Chem-Nuclear fund

‘A cancer in terms of public policy'

BARNWELL — Restoring $25 million borrowed from what was set aside to pay for monitoring and potential cleanup of a low-level nuclear waste site in Barnwell was part of Gov. Mark Sanford's rules of fiscal responsibility for the General Assembly Tuesday.

Sanford held a news conference at Chem-Nuclear, which has handled buried nuclear waste such as radioactive clothing from hospitals and nuclear reactor parts from across the country since 1971, to shed light on what he considers a critical need to restore borrowed funds to the facility.

The Barnwell Fund is one of several trust funds from which the General Assembly has borrowed $187 million since 2001. Users of the Chem-Nuclear site have paid into a long-term care fund over the years to pay for emergency needs and, at the same time, offset costs to the taxpayers.

However, $90 million has been borrowed from the Barnwell Fund alone to fill gaps in the state budget since 2001, Sanford said.

He pointed out that the fund, which now stands at $23 million, would have had a total of $136 million if it had not been touched and had its money used for other purposes.

Dollars have also been diverted from reserve funds, Sanford said. A total of $313,000 has been taken from the state's Insurance Reserve Fund Health Plan Reserve Fund and General Reserve Fund, for a grand total of $500 million which has been borrowed from trust and reserve funds in recent years, the governor noted.

"We have a cancer in terms of public policy. We have this greater problem in that ... people tend to want to get their hands on money in trust funds and take it and spend it on something else," he said, noting that the Barnwell Fund raid was "symptomatic of a larger hole ... in trust-fund borrowing in South Carolina government."

The governor's budget devotes $158 million to begin the process of repaying money borrowed from trust and reserve funds, including the $25 million as a first installment to begin restoring the Barnwell Fund. As required by the Fiscal Discipline Act of 2004, the budget also includes fully repaying the state's General Reserve Fund from which $150,000 has been borrowed.

The governor's budget also proposes using any surplus money from increased tax collections to replenish the State Health Plan Reserve Fund from which $135,000 has been borrowed in recent years.

"All of a sudden you begin to add up ... and it becomes a real problem. Money has a way of disappearing over time if you don't allow compound interest to work in your behalf," said Sanford, who likened the state's problems to those of the federal Medicare and Social Security programs which are facing fund replenishments of their own.

"Things are looking slightly upward in regards to the budget, but we ought to use this chance to recapture more money and pay off those trust funds. We extended what we had proposed in the Fiscal Discipline Act, which was to hold the rate of growth of government in this year to basically 3 percent," said Sanford, who also has the passage of a clearly-defined trust fund restoration legislation in the General Assembly among his goals.

While there are estimates that more money — as much as $190 million — could be going into the state coffers this year, "things can turn south again; we're not out of the woods nationally or as a state with regards to the economy," Sanford said.

"As we go into this budget year, it's absolutely critical that we restore those trust funds," he said.

Chem-Nuclear Plant Manager James Latham said he is pleased the governor is taking a stand on replenishing the Barnwell Fund.

"I'm just pleased that he's here, and I'm just happy to hear it being talked about because that's so important. The fund removes a burden from future taxpayers. Future generations shouldn't be saddled with something that we're doing. It's kind of a forward looking idea to have these funds set aside early on and built up over the operation period," Latham said, noting that the nuclear waste site will close its doors to the nation in 2008.

Under the Atlantic Compact agreement, only South Carolina, Connecticut and New Jersey will use the site after that.

While environmental groups have challenged the way Chem-Nuclear handles its waste and have protested the reissuance of Chem-Nuclear's operating permit, Sanford said he was not prepared to make a decision on the plant's future after 2008. He toured the nuclear waste site on Tuesday.

"The administration has not yet taken a position on post-2008. Part of taking a position would obviously and first and foremost be a look at safety. A number of folks in terms of local political leadership have made a very strong case for what a huge impact it has in Barnwell's economy ... from the standpoint of public policy. Outside of that, you look at the number of relatively high-paying jobs to this part of South Carolina ... but ... we want to look a little bit deeper before we commit one way or the other," he said.

'It plays very well to the ... economy'

Sanford also took a tour of the largest industry located in the Barnwell-based South Carolina Advanced Technology Park as part of his visit to Barnwell Tuesday.

Kronotex is a world leader in the laminate flooring industry. Kronotex USA President Norm Voss took Sanford on a tour of the plant's 360,000-square-foot building. The building is included in the company's $40 million Phase One construction which will employ up to 80 employees.

The building houses laminating and floor plank profiling lines capable of producing 200 million square feet of laminating flooring annually.

Voss said Phase Two construction will include construction of a medium-density fiberboard and high-density fiberboard core plant. Additional phases will include more laminating and flooring lines. Voss has estimated that at the end of Phase Two, total employment will reach 140 or more and that the company will invest approximately $135 million into the local economy.

The plant is able to manufacture the highest quality laminate flooring products, including embossed-in-register surfaces and beveled edges.

Sanford said the company fit perfectly into the state's forestry-based economic base.

"We have an economic cluster built around atomic energy here in South Carolina with the Savannah River Site and the Chem-Nuclear site. In that same vein, I would argue that Kronotex is tied to a forestry cluster that we have in South Carolina," the governor said. "If you look at the chip that ultimately is used in that foreign product, it comes from these pine trees in this part of the state.

"And they have more uses for ... pure chip and saw timber. I think it's something that ultimately is advantageous to the local economy, so I think it plays very well to the forest-based component of our economy in this state."