COLUMBIA - The state's top financial leaders say they have a plan to repay the $155 million deficit from fiscal year 2001-02 and create greater spending discipline to ensure the state has a balanced budget.

On Tuesday, the five members of the state Budget and Control Board proposed tapping into the state's capital reserve fund and general reserve fund during the next three budget years to repay the shortfall.

The repayment plan will be introduced when the General Assembly meets in January.

"I think it's an absolute must for the future of South Carolina," said Senate Finance Committee Chairman Hugh Leatherman.

The S.C. Constitution requires a balanced budget. But the panel says weak laws and loopholes have left the state unable to deal with its deficit from two years ago.

Republican Gov. Mark Sanford said uncontrolled spending put the state in a budget crisis; and now the deficit could hurt the state's top credit rating.

"This is a unified front for protecting the best interests of the taxpayers of South Carolina," said Sanford, the board's chairman. "This plan goes a long way toward reining in that spending - in addition to getting us out of a fiscal hole that could have cost us our Triple-A credit rating."

State Rep. Tracy Edge, R-North Myrtle Beach, said using the reserve funds is only a stopgap. That money will have to be replaced, too, he said.

Edge is a member of the Ways and Means Committee, which will be the first to review a bill to transfer the reserves to the deficit.

State law requires that the reserves be maintained, "so it's all got to come out of incoming revenue," Edge said.

But Edge said he thinks the economy is improving more than expected and is optimistic that state revenue won't be as down as some have predicted.

Sen. John Land, D-Manning, said it was good to maintain the state's credit rating, but the panel's plan still cuts $155 million from state agencies.

The plan would cap growth in the state budget at 3 percent a year until 2009.

But the state could pay off the deficit faster if the economy picks up, said Ways and Means Chairman Bobby Harrell, R-Charleston. Any revenue growth above 3 percent would be used to pay down the deficit.

"We all recognize it won't be easy," said state Treasurer Grady Patterson, a Democrat. "There's going to be a lot of hardships involved in it."

The capital reserve fund is used to fund bond bills and building projects statewide.

"As important as they are, we have an even greater responsibility to clear this up," Sanford said.