Sanford dodges tax hikes in new budget

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The 301-page plan for the fiscal year beginning in July would also use $20 million in lottery proceeds to increase the amount given to schools to spend per pupil, add $19 million to the state's ailing prison system and $140 million in recurring money to fund Medicaid, which was rescued last year by a federal bailout.

The Republican-controlled legislature will begin considering Sanford's plan when it returns to work next week.

State agencies would shrink from 87 to 72, meaning some state workers will lose their jobs, programs will be cut and some services, such as running a state golf course, will be turned over to the private sector to pay for the budget, Sanford said. The governor recommended closing the John De La Howe School near McCormick, transferring those students to the Wil Lou Gray Opportunity School in Columbia and eventually closing two University of South Carolina campuses in Union and Allendale.

Sanford also recommended increasing some fees, including tests for commercial driver's licenses and license plate transfers.

"It's an optimistic budget, Sanford said, "in the sense that if we work together we can do things differently than how they've always been done. Ultimately, that new approach is what's going to have the biggest impact in changing the mindset that currently exists in state government."

Inez Tenenbaum, state schools superintendent, said she was glad to see "a slight increase" in the Base Budget Costs. But she added in a prepared statement that "it's unfortunate that the money for that increase is raised by eliminating significant programs that improve academic achievement."

Legislative leaders had mixed reactions to the plan, though most credited the Republican governor with delivering a thorough look at the state's finances.

"I think it's a good start," said House Speaker David Wilkins of Greenville.

Rep. Robert Harrell, a Charleston Republican who chairs the House budget-writing committee, said the plan is unique among all governors' budgets he has seen in his 10 years in the House.

"I've never seen a budget like this where you could adopt it and run the government," Harrell said. "I'm sure we're going to want to change it and I'm sure they're going to be some changes I want to see a little differently. But it's obvious he paid attention to detail about how you fund things and making sure things didn't fall through the cracks."

Sen. John Matthews, an Orangeburg County Democrat who sits on the Senate Finance Committee, said he hadn't seen the plan and wouldn't pass judgment until he had. But he said he was skeptical of the amount Sanford said the plan could save in consolidation and "efficiencies."

"It sounds like funny money," he said.

Sanford said he believes citizens will support his plan even if it runs into legislative opposition.

"I think the average guy out there gets it as far as where we're coming from," the governor told reporters.

The $26 million in savings from consolidating the 15 agencies relies on an estimate of 18 percent in administrative cost savings for every agency combined under the plan. Sanford said the figures were based upon the State Budget Office and an examination of past consolidations.

But even if the restructuring doesn't realize that amount, Sanford told reporters, citizens will like having to deal with fewer agencies for one service.

Sanford also adopted many of the recommendations of a citizens panel that suggested restructuring changes, recommending that some statewide elected officers, such as the adjutant general, agriculture commissioner, comptroller general, secretary of state, treasurer and superintendent of education, become appointed posts by the governor.

The plan would also create a state inspector general, appointed by the governor, to hunt waste and fraud. Asked if waste and fraud exist in state government, Sanford replied "positively."

Sanford recommended the sale of some state surplus land, including some Department of Mental Health property on Bull Street in downtown Columbia and the Port Royal terminal, which Sanford said received only 18 ships last year. With other properties, and the sale of 6,000 state vehicles previously proposed by the governor, the budget estimates the state can gain $94 million.

Other savings in the plan would come from cutting programs and expenses. Every agency and school would be asked to reduce travel and phone charges by 15 percent.

Sanford recommended cutting the Clemson Public Service Activities by $8 million, "requiring a renewed focus on their core mission." Though founded to provide agricultural services, Sanford said the PSA's research and projects have grown beyond that in recent decades. The PSA now publishes booklets, Sanford said, on topics ranging from "Adventures with your camera" to "raising earthworms."

The budget recommends phasing out over three years the USC campuses in Union and Allendale and requiring USC-Sumter and Central Carolina Technical College there to share resources. Sanford also recommended cutting funding to the state's three research universities by 1.5 percent "to encourage collaboration and cooperation." Higher education as a whole would be cut by 2.6 percent, Sanford proposed, much less than cuts to colleges in the past two years.

USC President Andrew Sorensen said he looked forward to talking with Sanford about his proposal dealing with the USC campuses.

"We are hopeful that this proposal will be considered in view of the university's flagship mission of providing access to quality higher education all across the state, and not just as a simple budgetary question," Sorensen said in a prepared statement.

Wilkins and others said the proposal dealing with Clemson's PSA and the closure of USC campuses would be among the items drawing the most contention in Sanford's plan.

"They're going to cause a concern by many people but that's just part of the process," Wilkins said. "We'll look at all that and see where we believe, as the Legislature, we ought to make cuts."

Wilkins said another issue will be Sanford's recommendation to use lottery money to fund basic education expenses, since the law creating the lottery requires the proceeds be spent on new programs and not be used to replace existing funding.

Sanford said his staff believes it is legal to use lottery money the way he has recommended.

The governor spent months last year holding 32 agency budget hearings to review department finances.

He has already announced a proposal not included in Thursday's budget plan to cut the state's income tax rate by increasing the state's cigarette tax and applying the sales tax to lottery tickets.

"I don't think we've ever passed a governor's budget," said Rep. Joel Lourie, a Columbia Democrat. "But I think his budget will be a great starting point when we reconvene next week. You have to appreciate the fact that he's got the guts to make some tough calls. Whether I agree with them is too early to say."