Sanford, House wrestle over use of federal aid

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In a letter to Senate and House budget writers, Sanford recommended $68 million from a tax-cut measure approved last week by Congress to slightly increase education funding for the upcoming budget year and spending the rest on Medicaid.

But the chairman of the House budget-writing committee said he hadn't read Sanford's letter and the House voted Wednesday to spend $48 million less on education than requested by the governor.

The Republican-controlled House approved a budget which allocates $127.4 million of the new federal money on Medicaid and $20.6 million on education.

"This is a disaster," Rep. Joe Neal, a Hopkins Democrat, said afterward. "We've made a decision as a body that protecting education during difficult times isn't worth it. We're willing to increase classroom sizes, lay off teachers and rollback the gains we've made in education, all in the name of property tax reduction."

House Speaker David Wilkins said the House budget "is the best we can do under the circumstances."

"It reinforces the fact that we all think education and health care are the two most important areas," Wilkins said.

The action came as lawmakers scrambled to fund massive budget shortfalls in Medicaid and education programs for the fiscal year beginning in July.

Sanford has proposed funding those needs with a tax plan that would combine a 53-cent increase in the cigarette tax with a reduction from 7 percent to 5 percent in the state's income tax rate.

But the Senate has not yet put Sanford's plan to a vote and spent much of Wednesday paralyzed over a procedural debate that supporters of a cigarette tax increase said could kill its chances this year. Lawmakers are scheduled to end their work next Thursday unless they vote for an extended session.

Wednesday's House budget plan would set per-pupil spending at about $1,700, up from the $1,643 the House previously approved but still below the $2,201 recommended in a formula in the Education Finance Act.

Sanford wrote legislative leaders that using $68 million of the new federal money, plus re-directing another $10 million, would set the level at $1,777.

The governor also recommended restoring environmental trust funds lawmakers had earmarked to use to help pay for shortfalls in Medicaid.

Sanford wrote that while the federal funds would help plug the budget this year, "their availability may be a double-edged sword as we are simply postponing the inevitable debate regarding budget priorities."

Senators have spent weeks debating how to address the state's healthcare and education needs but have been unable to agree on a new revenue plan. The Senate last week sent its budget to the House, hoping to work out a compromise in the Legislature's final days to address budget shortfalls with some type of tax proposal.

The only plan to come up this week, to raise cigarette taxes, received a strong show of support Tuesday when the Senate refused 32-13 to table the plan.

But the plan's chances dimmed Wednesday when a procedural ruling kept backers from using a Senate bill to send the plan to the House.

Senate President Pro Tempore Glenn McConnell, a Charleston Republican and opponent of the tax increase, asked that the plan be ruled out of order because he said only the House can initiate bills that raise taxes.

Lt. Gov. Andre Bauer, a Republican, approved McConnell's request over the objections of Sen. Thomas Moore of Aiken and other Democrats.

"If we don't repeal this point of order the Senate will be the laughingstock of the state," Moore told senators, who refused to overturn Bauer's ruling.

Sen. Brad Hutto, an Orangeburg Democrat, argued that without the Senate bill, the tax proposal would die.

McConnell said he would use the same procedural argument today if supporters of Sanford's income tax reduction plan tried to attach it to the same bill.

He told senators that no tax increase proposal would survive anyway in the House, whose leaders have vowed to fight such a measure. Sanford has said he will veto any cigarette plan not coupled with his income tax reduction proposal.

"We're pretty much bogged down," Senate Majority Leader Hugh Leatherman said afterward.

Sen. Darrell Jackson, a Columbia Democrat, said Wednesday's procedural fight "plays into the hands" of opponents of the tax plan, since senators have little time to send a plan over to the House for its review before the session ends.