COLUMBIA, S.C. - In a speech overshadowed by the state's budget crisis Wednesday night, Gov. Mark Sanford promised little in the way of new programs while telling the Legislature he wants support to restructure state government.

Sanford also laid out his terms for supporting a cigarette tax increase to cover shortfalls in state Medicaid funding: lower income taxes.

"I wish I could tell you the state of our economy was strong," Sanford said.

"I wish I was assuming leadership of a state whose budget was sound, but everybody in this chamber knows that it is not," he continued. "Our budget is a mess," and there is a "disconnect between the promises of government and our ability to pay for those promises."

The state's budget may fall as much as $1 billion short of meeting more than $5 billion in spending needs in the fiscal year that begins July 1. Sanford told legislators that restructuring government should be viewed as an opportunity created by hard times.

"I can't quarrel with anything he said," said Senate Minority Leader John Land, D-Manning.

Other Democrats agreed. "He's our leader. Let's get behind him," said Sen. Gerald Malloy, D-Hartsville.

"I thought it was a sobering speech," said Senate President Pro Tem Glenn McConnell, R-Charleston.

But the speech fell flat for some. "I thought it was a good speech if he was still on the campaign trail," said Rep. John Scott, D-Columbia.

Sanford repeated stump talk, urging lawmakers to decrease statewide elected offices and to consider having governors and lieutenant governors run on a single ticket.

Some of the Budget and Control Board's functions also should be moved under a new Cabinet-level administrative office, Sanford said.

Taken together, Sanford's proposals represent a substantial consolidation of power under the governor's office "under the aegis of streamlining government," said Winthrop University political science professor Scott Huffmon. That could be tough to get through a Legislature that tries to keep power for itself, he said.

But the governor lacks power to make change where its needed most, particularly at the Department of Public Safety and its Division of Motor Vehicles. Sanford said he can't fire the people who run those operations and that reduces accountability.

Legislators also need to send him a campaign finance reform package. Sanford noted that Gov. Jim Hodges, the Democrat he defeated in the Nov. 5 election, had vetoed a previous campaign finance bill. "If given the chance, I'll sign it," Sanford said.

Sanford singled out some state employees who could lose jobs if his proposals succeed: lobbyists who work to sway legislators to allocate money to their agencies. Those employees cost the state $1.9 million a year and taxpayers can no longer afford that practice, he said. He also said since taking office he had eliminated the $80,000-a-year job of director at the Gov.'s Mansion.

Sanford vowed to meet regularly with legislators and residents outside of the Statehouse and set aside one evening each month for folks to drop by his office.

He also touched on one of the state's biggest budget problems: increased Medicaid spending.

Support is growing in the Legislature to raise cigarette taxes to cover the increases. But Sanford and 66 members of the General Assembly have signed Americans for Tax Reform pledges not to raise taxes.

A recent survey showed people were willing to support legislators and the governor if they didn't keep their promise. "Unfortunately the polls do not change my mind nor do they release me from my pledge," Sanford said.

The governor, just elected in November, said he was willing to consider a cigarette tax increase only if there are major changes in the state's Medicaid system - the prime beneficiary of current proposals - and if the Legislature agreed to lower income taxes.

Sanford campaigned on a proposal to apply the state's sales tax to gasoline, using the money generated to eventually eliminate state income taxes.

Medicaid reforms could come in a variety of areas, Sanford said. There is something wrong with a Medicaid system that will pay for a series of specialists' opinions or specialty procedures but doesn't pay for significant prevention, he said.

The speech was light on education initiatives, a marked change from Hodges' past annual messages.

Sanford asked legislators to help make schools smaller, include conduct grades on report cards and make teachers "sovereign" in the classroom.

"I think that tragically too many teachers in South Carolina are forced to baby-sit, not to teach," Sanford said.

The state should streamline the way schools get money and give local schools more latitude in how they spend it, Sanford said.

But Sanford's proposal to create more neighborhood-based schools could run into problems. Huffmon noted that such schools have been blamed for resegregation in public education.

The solution doesn't rest in smaller schools, Scott said. It's white majority and black majority school districts that divide counties. "Let's merge those school districts together," he said.

Sanford also called for passage of a 0.08 percent blood-alcohol standard for drunken driving convictions; the current standard is 0.10 percent. The federal government is pushing the lower level by threatening to take $60 million in federal highway funds away from South Carolina. Sanford wants to see the tougher standard accompanied by seizure of vehicles.

McConnell, the Senate Judiciary Committee chairman, has fought the federally imposed standard in the past but said the state may have to go in the direction of the 0.08 percent level. But, "we cannot surrender to a machine guilt or innocence," he said, speaking of Breathalyzer tests.

McConnell, however, said he would support confiscating cars of people repeatedly convicted of drunken driving. "I think he is dead on the money as far as repeat offenders," he said.