While this was true last year as well, Gov. Mark Sanford did not submit an executive budget plan to the Legislature in his first year in office, so there was no chance to delight in harmony. This year, the governor has released an ambitious plan full of structural changes that has been relatively well received.

The party line holds that now, at long last, nothing stands in the way of significant reforms coming out of Columbia.

But as the General Assembly returns to session Tuesday, its members know that with opportunity comes expectations.

The financial situation is bleak. South Carolina is $350 million in debt, and for the fifth consecutive year the state anticipates zero revenue growth.

The shortfall has led to six across-the-board budget cuts in three years and reduced the roster of the state's 70-plus agencies by more than 5,700 employees. Lawmakers have exhausted both of South Carolina's rainy day funds: the capital reserve fund (2 percent of the previous year's budget) and the general reserve fund (3 percent of the previous year's budget).

To say the Republican leadership has its plate full is an understatement.

Jack Bass, a College of Charleston professor and expert in South Carolina politics, said the Republicans will have no one to blame if their ideas fall flat this year.

"It is a dangerous time for them," he said. "They are in total control, and they will be held accountable for their decisions."

Having the same party control both the legislative and the executive branches of government is no guarantee of smooth sailing. While Sanford's budget plan was greeted with optimism by key legislators last week, there have been hints of friction.

If this session turns into a contest of wills between the General Assembly and Sanford, the GOP may learn the hard way that sometimes it pays to be careful what you wish for.

BUDGET, BUDGET, BUDGET

While lawmakers will certainly discuss many items this time around -- tort reform, income and property tax reform, government restructuring -- it is clear one issue will be the engine that drives this session.

"Budget, budget, budget," said state Rep. Joel Lourie, D-Columbia. "We may discuss, argue and fight about other things, but that will be the main topic for sure."

It is not unusual for a single issue to emerge as a session's theme. Video poker, the Confederate flag and the lottery all dominated their decisive sessions.

For the second year in a row, the $15 billion budget ($5 billion of which is state revenue and controlled by the General Assembly) stands alone as the 800-pound gorilla on lawmakers' backs.

Generally speaking, there are two ways to tackle a shortfall: raise taxes or cut services. For the past two years, lawmakers have chosen the latter.

It appears the same approach will be taken this year. The governor's proposed budget, which legislators plan to use as a starting point, would not increase taxes but would reduce services and cost some jobs.

"The budget decision we are going to make will be a tough one," said Speaker of the House David Wilkins, R-Greenville. "But the bottom line is we have less revenue than we have needs. We made cuts the past two years, and I think ultimately, that's what we will do again this year."

In 2001, the state spent $5.4 billion in general revenue funds and collected only $5.08 billion. In 2002, the state lowered its spending to $4.9 billion and collected $4.96 billion.

This reflects the "cut-the-fat" approach that has become popular in Columbia.

State agencies have grown used to this song. No agency budget has gone unscathed by the cutbacks.

Department of Mental Health Director George Gintoli has said this next round of cuts could be the worst yet for his agency. That's saying something.

Sanford's plan this year is to cut DMH's budget by another $8 million. Since 2001, state lawmakers have reduced the DMH budget by more than 17 percent, almost $37 million. As a result, the agency lost 822 employees, which has lead to drastically increased caseloads (some clinics report as many as 250 patients per one clinician), the loss of 25 mental health programs in schools and the closing of more than 120 adult long-term beds.

During that same period, state lawmakers reduced the Department of Corrections' budget by 18.8 percent and the Department of Social Services' by almost 30 percent. DSS has lost 1,300 employees in the past 18 months, 700 since January.

Still, the bottom line is the bottom line. If no one can come up with ways to generate new revenue, it is likely that many agencies will face cuts in the area of 7 percent or more.

Sanford's proposal calls for giving the DOC an extra $19 million and for massive restructuring of DSS. His budget would rename the agency and consolidates it with two other agencies. The newly named Department of Human Services would comprise a Division of Social Services, a Division of Vocational Rehabilitation and a Division for the Blind.

Last year, DSS received $87 million from the state. The new DHS would be budgeted, under the governor's plan, at slightly more than $100 million.

Legislators are still digesting Sanford's budget proposal. It is clear that while many concerns are shared, priorities differ.

"We are struggling to fund K-through-12 education and Medicaid," said state Rep. Bobby Harrell, R-Charleston, chairman of the House Ways and Means Committee. "I think we have to cut the budget elsewhere, which isn't going to be easy given the fact that we have done the same thing for several years in a row, now."

The governor's proposal increases overall K-12 education spending by $29.7 million. About $20 million of that would come from lottery funds to increase per-pupil spending by $67 to $1,810.

FEW NEW IDEAS

Not everyone favors cutting services.

Sen. Robert Ford, D-Charleston, said this approach to government is "crazy."

"They assume this will save money, but no economist in the world would agree with their approach," he said. "The only thing that will work to pull this state out of debt is to come up with new ways to generate revenue."

Ford has two bills that address this issue, both dealing with the gaming industry. He wants to bring back video poker and add dockside gambling to the list of state industries. He said the two would generate $1.3 billion in tax revenues and create thousands of jobs.

Few share Ford's opinion. Most ideas floated so far deal with government restructuring or tax reform.

Government restructuring is an old idea that was given new life last year. Sanford, Wilkins and state Rep. John Graham Altman III, R-Charleston, all have plans that would, according to them, reduce the amount of duplication found in state government by increasing accountability statewide.

The plans deal with eliminating several constitutionally elected positions, such as the secretary of state and the superintendent of education, and making them the governor's appointees. Sanford's plan would leave only one independent elected official, the attorney general. The reformers say their schemes not only would allow for a more unified vision of government but save money.

Sanford last week also called for placing the duties of the election commission under the secretary of state's office.

In the area of tax reform, there are two distinct camps, each with its own philosophy for revamping the state's economy: property tax reform and income tax reform.

Property tax reform is an idea that seems to be gaining steam, especially with Lowcountry lawmakers. So far three plans are on the table, proposed by Harrell, House Majority Leader Rick Quinn Jr., R-Columbia, and state Sen. David Thomas, R-Greenville.

The plans differ in specifics, and none figures to add significantly to state coffers. Their underlying theme is that the key to a healthy economy is putting money back in the taxpayers' pocket.

Harrell's plan, for example, would eliminate the property tax on cars in three years with an 80 percent reduction in the first year. The lost money would be made up by 1-cent sales tax increase on items other than food.

Thomas' plan, on the other hand, would do away with some property taxes, replacing them with an across-the-board 2-cent sales tax increase.

So far there is only one voice calling for income tax reform. That voice is the governor's, but it has become muted.

Earlier this year, Sanford announced a plan to cut the state income tax by 15 percent and replace the lost revenues with a 61-cents-per-pack tax increase on cigarettes and by applying the state's 5 percent state sales tax to lottery tickets.

Sanford said income tax reform has a direct correlation to the strength of an economy, both by spurring investment and by attracting business. Few lined up to support the idea, and Sanford didn't include it in his budget proposal.

He did say he still favors the plan and will continue to push for it.

PARTY LINES

While it is true the GOP is in power in Columbia, most agree that Sanford is not your typical Republican. This was evident during his time in Congress, where he earned a reputation as a maverick with no qualms about going his own way, even if that left him in opposition to the party.

To supporters, this is an admirable quality. To detractors, this suggests he is unable to compromise. Experienced members of the General Assembly contend that in state government, real change requires consensus building.

The governor has said he will have no problems working with the General Assembly. GOP leadership in the House and Senate have echoed that sentiment.

But last month a poll commissioned by the governor made its way through the Legislature, angering many who saw it. Conducted by the governor's pollster, Basswood Research, it asked several questions regarding the popularity of the governor and his agenda. It also asked questions regarding the popularity of leading GOP figures in the House and Senate.

While the results implied widespread support for the governor and his ideas for state reform, the loaded wording of some questions caused many in the House and Senate to take offense at what they perceived as a shot across their bow.

Quinn said the poll was probably not meant as an attack on the General Assembly, but added, "We have a lot of problems to deal with, and no question (the poll) hasn't helped things."

Still, Sanford's proposed budget got a warm reception among lawmakers.

GOP leaders such as Harrell and Wilkins said they have a rare opportunity this year, which happens to be an election year, and they don't want to squander it.

Sen. Glenn McConnell, R-Charleston, president pro tem of the Senate and one of the most powerful people in Columbia, doesn't think they will.

"I felt we had good communication with him (Sanford) last year," McConnell said. "Both the General Assembly and the governor are interested in tax reform and government restructuring, so I think we will have a harmonious relationship. And really, I'm excited about the opportunity we have to make some changes."

SOME KEY ISSUES OF THE 2004 LEGISLATIVE SESSION

RESTRUCTURING: The push to restructure state government is gaining steam. Spurred on by a report from the governor's commission on Management, Accountability and Performance earlier this year, lawmakers seem ready to eliminate some elected positions to reduce duplication and increase accountability. Here are a few of the ideas that will get floor time this session:

-- Gov. Mark Sanford's budget proposal, released last week, contains a comprehensive restructuring plan that spans the breadth of state government. It would reduce state agencies from 87 to 72 and revamp the look and control of the executive branch. Under his plan, the governor and lieutenant governor would run on a single ballot; the constitutionally elected adjutant general, commissioner of agriculture, comptroller general, secretary of state, state superintendent of education and state treasurer would become gubernatorial appointees; and the secretary of state would supervise elections in the state. Only the attorney general would remain as an independent elective office.

-- State Rep. John Graham Altman III, R-Charleston, has proposed a bill that transfers the state education superintendent's authority, responsibility and duties and nearly all of its funding to the governor's office. It would leave behind only the office itself and its salary. After such a transformation, the office would be virtually powerless, making its evolution to an appointed position nearly inevitable.

-- Speaker of the House David Wilkins, R-Greenville, has two bills dealing with government restructuring. One proposes the establishment of a Department of Administration, and the other proposes making four constitutionally elected offices -- comptroller general, state treasurer, secretary of state and education superintendent -- gubernatorial appointments.

PROPERTY TAX REFORM: Property tax reform is a hot topic. There is widespread support in the General Assembly for some sort of change. Here are a few of the more prominent plans:

-- State Sen. David Thomas, R-Greenville, is proposing a bill that would do away with some property taxes, replacing them with an across-the-board 2-cent sales tax increase.

-- State Rep. Bobby Harrell, chairman of the House Ways and Means Committee, is pushing a plan that would eliminate property tax on cars in three years with an 80 percent reduction in the first year. That revenue would be replaced with a 1-cent sales tax increase on items other than food. This plan also calls for eliminating the periodic reassessments of real property, freezing the assessed value until the property is sold or significantly improved.

-- State Rep. Rick Quinn, R-Columbia, has proposed a plan that would cut property taxes on homes and businesses by 50 percent and eliminate property taxes on cars and trucks. The plan also would cut income taxes by 15 percent. Quinn proposes to replace the lost revenue by eliminating special-interest sales tax exemptions, including the exemption on gas, increasing sales tax by 2 cents (except for food and drugs), eliminating the tax assessor's office and requiring a two-thirds vote by cities, counties and the state before taxes can be raised above the rate of inflation.

TORT REFORM: A belief that frivolous lawsuits are damaging business interests has led to a series of pre-filed bills, several of which have been proposed by a team of state representatives led by state Rep. James Harrison, R-Columbia:

-- A bill addressing the state's change-of-venue laws, requiring lawsuits to be brought in one of only three places: where the defendant resides, where the cause of action arose or where the plaintive resides. A subcommittee is expected to lower that number to two: where the defendant resides or where the cause of action arose. This is to address what lawyers refer to as "forum shopping."

-- A bill requiring lawyers to affirm that their lawsuits are not frivolous or intended to delay.

-- A bill that would reduce the statute of limitations from 13 to eight years for defective construction.

-- A bill calling for a two-part trial system when a civil action before a jury seeks punitive damages, one assessing fault and the other addressing damages.

-- Clay Barbour

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