CHARLESTON, S.C. - Gov. Mark Sanford praised the State Ports Authority Thursday but wondered whether Santee Cooper, the state-owned utility, might need another kick to change the way it does things.

"Santee Cooper has great people ... but that organization has been a little more reticent about looking at different ways of doing things," Sanford said following one in a series of budget hearings before he writes his executive budget.

"The real problem with money this year is people think we're out of the woods with the budget but we're not," Sanford said.

At a hearing a year ago, the governor questioned Santee Cooper's practice of donating hundreds of thousands of dollars to charities and civic groups in its service area.

"They haven't seen those red flags," Sanford said Thursday, adding that it's like the second kick of a mule. "Is it going to require a third kick in looking at, a little more politically, the way that they run their house?"

Sanford was pleased the Ports Authority took steps to improve its bottom line, including planning to sell its Port Royal terminal. The governor signed a bill earlier this month allowing that to happen, a move that should generate millions of dollars for the state.

The Santee Cooper donations include almost $63,000 for the Heritage Golf Tournament played each year on Hilton Head Island.

"What I think is so important that came out of this budget hearing is if you are spending $70,000 on a golf tournament and the Department of Commerce has cut out that activity, shouldn't that be a red flag?" Sanford said.

"If you are spending hundreds of thousands of dollars making a variety of different contributions, how do those stack up, relatively speaking, to other needs of the state?" he asked.

"It's a philosophical issue whether Santee Cooper should be making donations and contributions or not," Santee Cooper Chairman Graham Edwards said later. "Historically, we have been in a position of we want to support the communities in which we live and work."

He said everything the utility has done has been above board and it is legal to make the contributions

"I think it's worth doing" if the utility can spend $60,000 a year at the Heritage and attract a couple of industries to the state, Edwards said.

"We'll go back and review it based on what the governor's comments have been and we'll decide where we go," he said.

But state Rep. Shirley Hinson, R-Goose Creek, told Sanford that Santee Cooper needs to provide revenue for the state.

"Business has to change at Santee Cooper ... maybe because the state needs the money so badly," she said. "I believe the majority of the people think Santee Cooper can provide more revenue."

Closing the Port Royal terminal came up last year at a similar hearing when Sanford asked Bernard Groseclose, the State Ports Authority's president and chief executive officer, if there are missions the agency did not need to be performing.

"I applaud the way they have begun the process of change," Sanford said. "Whether it's closing the Port Royal facility, whether it's closing down a rail line or whether it's relooking at health care benefits, there have been a number of changes."