House panel would raid waste clean-up fund to balance budget

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The proposal was part of the House Ways and Means Committee appropriations process that is laying out draconian cuts in most state agency budgets for the year that begins July 1. Committee Chairman Bobby Harrell, R-Charleston, said the panel will vote on the compiled budget on Wednesday.

A few agencies that are central to health, education and public safety, will not suffer as dire reductions as other agencies.

The Corrections Department, which has lost hundreds of officers because of a series of spending cuts over the past two years, is slated to have about $6 million restored to its $254 million budget. And public education is expected to be funded at the level it is currently receiving, about $1.73 billion.

But John Cooley, chief financial officer at the Department of Education, said the fact that no further cuts will be made belies the funding setback schools have suffered over the past 18 months.

"They have not further reduced us, that is correct. But we are down $239 million from the approximately $1.9 billion available to us on July 1, 2002," Cooley said.

And committee debate revealed that per-student spending will drop to $1,643 next year from the current $1,749 because more students are expected to enroll next year.

Higher education also will continue to suffer deep cuts according to recommendations from a subcommittee.

Clemson University would be cut $9.5 million, or another 9.88 percent of its state funding. The University of South Carolina at Columbia's budget would take the same percentage hit, losing $16.4 million. And USC-Spartanburg would be cut $1.2 million.

House Majority Leader Rick Quinn, a Columbia Republican who chairs the subcommittee that oversees DHEC's budget, said he strongly supported raiding the $13 million Laidlaw clean-up fund to pay for DHEC's operating expenses.

He noted that the fund represents 10 percent or less of the potential $130 million-$170 million cost of such a clean-up, and in any case, state taxpayers are liable for cleaning up any spilled hazardous waste left at the Pinewood facility.

Raiding the fund could represent a final chapter in the state's half-hearted attempts over the past decade to hold the landfill operator responsible for potential future clean-ups at the landfill that is less than one-quarter mile from the shore of Lake Marion.

In 1994, Laidlaw Environmental Services deposited $14.5 million with DHEC as a first installment on the $133 million state regulators said they should deposit in the fund.

Company officials at the time complained that the fund was not necessary.

DHEC had ruled in February 1994 that Laidlaw should set aside $30 million immediately and add $103 million to the fund by the year 2000. But the board backed off in April 1994, allowing Laidlaw until 2004 to complete the fund. Until then, Laidlaw was required to cover the missing portion with insurance, bonds or some other method that is stronger than a corporate guarantee.

Laidlaw later became Safety Kleen, and now is in bankruptcy court. The company pledged a package of securities it said would cover the remainder of the clean-up fund, comprising a $94-million corporate guarantee from Laidlaw's Canadian parent company; a $30 million insurance policy; a $28 million letter of credit for closure and post-closure costs, and nearly $9 million in cash generated by activities at the site. That totaled about $160 million.

But DHEC chief Earl Hunter told the House budget subcommittee that those securities, pledged by Laidlaw in lieu of cash, have been determined to be worthless. DHEC is one of the bankrupt company's biggest creditors, seeking to have the debt made good in bankruptcy proceedings.

"The state will still be liable to clean up the site whether that money is there or not," Hunter told the panel.

All the state currently has to pay for potential spills at the hazardous waste landfill is the $13 million that Quinn proposed on Tuesday to use for operating expenses at DHEC.

Rep. Rex Rice, R-Easley, turned to Quinn and asked: "How much are you stealing," to which Quinn replied, "I'm stealing every penny I can."

Rice said later he thought it was "crazy" to raid the clean-up money. "We need some money in that fund in case a clean-up in necessary," Rice said.