Ken Ruinard Independent-Mail A statue of the late U.S. Sen. Strom Thurmond, S.C., who served as a South Carolina governor before that, stands in front of the South Carolina state house.

By Nicholas Charalambous
Independent-Mail
January 10, 2004

There’s a lot riding on South Carolina’s new legislative session.

Gov. Mark Sanford is still looking for a major victory for his legislative agenda in the second year of his administration, needing to fulfil his campaign promises of radical reform and visionary leadership.

The legislature faces a fourth year of spending cuts to eliminate a shortfall of $500 million or more, without any prospects of hundreds of millions from the federal government that helped lawmakers out of a pinch last year.

State agencies are voicing concerns that the budget slashing has already cut department funding to the bone, and that it is now threatening to seriously compromise the missions of their agencies.

On top of all that, all 170 members of the General Assembly will be up for reelection.

As Upstate legislators prepare to begin work Tuesday, they know the session will be a tough one.

"It’s going to be trying," said Rep. Brian White, R-Anderson. "There’s going to be a lot of sleepless nights in this session."

Several lawmakers in Anderson County’s delegation say the state’s budget will continue to absorb most of the legislature’s time and energy, but most agree that some important legislation has a good shot at being passed — even in the less-than-ideal circumstances.

On top of that list, they say:
•Tax reform: Lawmakers say that there’ll likely be serious discussion of taxes with a number of competing plans. Gov. Sanford is seeking an income tax reduction in exchange for a cigarette tax hike and lottery sales tax. Legislators in the house and senate are discussing removing sales tax exemptions or trading a hike in the sales tax with the elimination of some local property taxes.

• Government restructuring: The issue was first broached by Gov. Sanford as a way to transform some elected officers, such as Agriculture commissioner and Secretary of State, into cabinet appointees, but some lawmakers think the state’s fiscal outlook could provide motivation for a more radical overhaul of government operations.

•Higher education: Lawmakers think Gov. Sanford’s proposal to privatize the state’s major research universities was a way to show he was serious about eliminating waste and duplication in the higher education system by putting all institutions under one board of regents. The main point of debate will be whether the state’s three research universities will be allowed to have more autonomy than that.

•Tort Reform: Legislation to limit lawsuits and financial damages in certain industries, especially healthcare, was the subject of a legislative task force and is popular among business interests, although it will face strong opposition from the legal community.

Among the sleeper issues that could come up are bills to tweak reassessment, including one to eliminate it entirely that was filed by state Rep. Ronny Townsend, R-Anderson, chairman of the House committee on Education and Public Works.
Lawmakers say the issue is high on voters’ priority lists as they see property tax bills go up, largely based on skyrocketing home values, especially in high growth areas and those that attract out-of-state retirees.

"I think it is a method that has outlived its usefulness," Rep. Townsend said. "Eliminating reassessment is going to be part of a major bill."Most of those legislative priorities match up with Gov. Sanford’s legislative agenda, in part reflecting his leadership during the off-season, but question marks remain about whether the details of the legislation that makes it to the floor will substantially reflect the contours of his agenda.

The governor is under significant pressure to improve on the performance in his freshman year, which was marred by sniping from both Republicans and Democrats in leadership positions about his lack of consultation with them and an unwillingness to work with them on shaping legislation.

Bruce Ransom, a Clemson University political science professor, said people may begin to use the v-word — as in vulnerable.
"It’s an added burden to need a major success in an election year," he said. "He has to be a lot bolder, and he has to work the legislature. It seems to me he has not figured out how to work with the leaders in the state senate and state house."

State Sen. Billy O’Dell, R-Anderson, who recently switched to the Republican party, echoed that view. He said that the governor’s stature will benefit from sparking important discussions on reform initiatives, such as government restructuring and higher education reform.

"He’s done a decent job of bringing new ideas to the table and new proposals," he said. "We haven’t had a lot of that in past. We’ve been doing status quo."

The tone of the session undoubtedly will have a lot to do with the exact scope of the budget dilemma facing the state, but its magnitude won’t be known for at least several more weeks.

The state’s Board of Economic Advisors — the official revenue forecasting agency — has reported recent revenue growth at about two-thirds of original forecasts need to balance the 2003 budget, although economic conditions are improving.
The Board asked for a mid-year cut for the seventh time in 2003.

State Rep. Dan Cooper, R-Piedmont, a member of the budget-writing House ways and Means Committee, said he’s optimistic that the rumored $500 million deficit could be projected to be as little as $100 million when it comes time to pen the state’s 2004-2005 spending blueprint.

Bruce Gillespie, the board’s chief economist, was more cautious.

"There’s reason for optimism, but until these companies start hiring, the BEA is not going to be willing to raise its estimate."
If significant cuts are called for, few lawmakers were able to offer any ideas about what cuts could be made.

"Naturally, you want to try and protect education and health care," state Rep. White.

Most observers agree there’s little if any low-hanging fruit to pick off, but they also acknowledged there wasn’t an appetite for additional taxes that would make the budget work easier.

The toughest problem could be finding $120 million for Medicare — without the benefit of last year’s one-time money — so the state continues to receive another $360 million in federal matching funds. Medicaid reform also is considered a possible way to bridge the gap.

Overall, lawmakers seem to be in the mood to "hang on" with cuts and other financial massaging to handle the deficit without having to broach any net increases in taxes.

"We’ve got to just hold the line now we’re coming out of this thing," said Rep. White, referring to the economic downturn. "Let’s hunker down and weather the storm one more year, and we’ll be in good shape."

Nicholas Charalambous can be reached at (864) 260-1256 or by e-mail at charalambousnc@IndependentMail.com.

Copyright 2004, Anderson Independent Mail. All Rights Reserved.