Posted on Sat, May. 08, 2004


Senate makes Sanford's ideas key to dealing with deficit


Associated Press

Senate Republican leaders found a way early Saturday morning to take the albatross of a two-year-old deficit off their necks and hang accountability for dealing with it on Gov. Mark Sanford.

The Republican governor this week renewed pressure on the Legislature to deal with a $155 million deficit created in August 2002 when former Comptroller General Jim Lander closed out the fiscal year. Sanford said the Senate needed to pump $110 million in higher-than-expected tax collections into the old debt that he said threatened the state's credit rating.

Yet instead of covering the $155 million debt with cold, hard cash and agency spending cuts, senators used the same uncertain funding sources - the sale of state cars and property - that Sanford had used to balance his executive budget.

Many senators agreed dealing with the deficit was simply the fiscally responsible thing to do. Some Democrats wanted to handle it by increasing cigarette or car sales taxes, while some Republicans supported Sanford's message of using the extra revenues. By Thursday, the Senate had knocked the $5.3 billion budget out of balance by $110 million and more.

Deals came and went, but Senate Finance Committee Chairman Hugh Leatherman offered the compromise just before 1 a.m. Saturday.

Sanford had balanced his executive budget partly on a plan to raise $34 million by selling surplus cars and $32 million from real estate sales. Much of the car money would have covered rising state employee health insurance costs.

The House's version of the budget used $25 million from Sanford's used car plan and $32 million from real estate. At the time, senators were skeptical.

"How can you fund the budget on money that doesn't exist?" asked Sen. Nikki Setzler, D-West Columbia.

In April, the Senate Finance Committee flatly rejected the $25 million car proposal as too speculative. It cut in half the $32 million from property sales. The real estate sales then were ruled out of order in floor debate Thursday.

But perspective changed Friday after Republicans fought for hours behind closed doors.

Leatherman tied Sanford's ideas to paying off the deficit. He told the Senate the funds were coming from the governor's executive budget and obviously they were good "or he wouldn't have them in there."

Sanford will end up overseeing whether the plan works. Sometime later this year, the Budget and Control Board, which Sanford chairs, will get a report saying if the car sale plan will work.

"There will be a study done. They will decide whether it's cost effective to sell the fleet or not sell the fleet," Leatherman said.

Shortly before Leatherman took the floor, Sanford's co-chief of staff, Tom Davis, told reporters what was in the works as he sat down looking tired from a day of shuttling between the governor's office and the Senate chambers upstairs. "It's good news, bad news for us," Davis said. It was good "that they are taking some measures to pay off the deficit," Davis said. The bad news is the deficit reduction is contingent on selling property and "we would have rather it be through cuts," he said.

But cutting the budget was the last choice, Leatherman said.

"Our agencies have been cut so much. ... We've got so many needs in this state that we need to serve the people of this state," he said.

Some will question Sanford's approach to handling state finances with out-of-the-box concepts if money from his car and land sales plans don't materialize. And "it would be politically hard for him to come out with an official criticism" of using the car and real estate money, Winthrop University political science professor Scott Huffmon said. As a political move, "it's beautiful," Huffmon said.

Leatherman has "all his flanks covered so whenever the criticism pops up he has a natural, logical and, most importantly, electable position on all of it," Huffmon said. That's important this year with all of the Legislature's 170 seats up for re-election.

Was it a political game? "That did not cross my mind," Leatherman said as the Senate adjourned. "I don't play games with people."

But Sanford "was boxed in and if anything got his ears boxed," said Francis Marion University political scientist Neal Thigpen. "It's another instance in which he was outmaneuvered and left holding the bag."





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