COLUMBIA, S.C. - Gov. Mark Sanford urges South Carolina's rural communities to play on their strengths of low costs for land and labor and to pursue new ideas for economic development.

The Republican governor said he would help rural counties by backing their efforts to gain greater home rule over the Legislature and by phasing out the state income tax, which he said would promote a more entrepreneurial climate.

But U.S. Rep. Jim Clyburn, D-S.C., said money matters and government should invest more taxes in the state's poorest regions.

On Monday Sanford and Clyburn addressed 200 people attending the annual Gov.'s Rural Summit, which comes in the wake of 12,200 jobs lost in rural areas from the end of 2001 to December 2002.

Columbia, Greenville-Spartanburg and Charleston gained 12,300 jobs in those 12 months, according to the South Carolina Employment Security Commission.

Clyburn, who represents a largely rural constituency from Eastover to Colleton County, said federal dollars are needed to provide clean water and build roads in rural areas.

Without a willingness to invest in such projects, the quality of life in rural areas deteriorates and more young people seek better opportunities in other states.

"Opportunities created for our children and grandchildren are not wasteful," he said.

But Sanford said rural areas cannot rely on getting a disproportionate share of state tax dollars because they have fewer votes than the state's metro areas.

"You will never be able to get there on a political model," he said.

J. Mac Holladay, an economic development consultant in Atlanta, who was director of the South Carolina Development Board from 1985 to 1988, said the Palmetto State needs to pursue a broad range of strategies from nurturing existing businesses to building health care and other higher-paying service sectors.

At the same time, the increasingly global economy is sending many higher-paying service jobs from law to engineering overseas, he said. "This is not about tinker toys; it's about some our best jobs."

Manufacturing jobs will continue to decline in South Carolina and other states and they are never coming back, Holladay told the group.

South Carolina lost 15,500 factory jobs last year, 9,500 of them in rural counties, according to the commission.

Sanford suggested rural leaders use "guerrilla tactics," such as leapfrogging technologies.

He cited the example of China, where rural areas without telephones have employed large numbers of wireless phones instead of stringing wire. Sanford said rural areas could develop broadband Internet access to lure people starting up companies.

Information from: The State