Highways, health care and education issues will dominate the agenda for state lawmakers when the 2007 legislative session opens on Tuesday.

Gov. Mark Sanford has proposed a $6.5 million budget that includes government restructuring and raising the state’s lowest-in-the-nation cigarette tax to help fund a $205 million income tax cut.

Legislators, who have had a contentious relationship with Gov. Sanford over the years, already have been critical of several components of the proposal.

Unlike Gov. Sanford, many lawmakers want to use money from a higher cigarette tax to expand Medicaid programs, provide health insurance for uninsured children and make health insurance more affordable.

Rep. Harry Ott, D-Calhoun, said he favors using the additional revenue generated by the tax to help fund the state’s Children’s Health Insurance Program.

“We as a state cannot afford to have 150,000 children with no health insurance,” he said. “We have an opportunity to address those needs. We need to take on the responsibility.”

Another issue sure to be hotly debated is the proposed restructuring at the South Carolina Department of Transportation, which was the subject of a Legislative Audit Council investigation for claims of financial mismanagement and waste.

Gov. Sanford supports making the agency a cabinet position.

A legislative study committee, however, plans to propose giving the governor the authority to appoint a secretary of transportation. The appointee would serve as the executive director and chairman of a board of six commissioners, each representing one of the legislative districts.

State Rep. Michael Thompson, R-Anderson, said he would be hesitant to make the agency a cabinet position.

“I certainly think (the proposed reform) a good start,” Mr. Thompson said. “Anything that can provide more accountability to that part, I would support. I’m not sure if making cabinet is the best option or not.”

However, state Sen. Kevin Bryant, R-Anderson, said he would support the creation of a cabinet position, although he believes that scenario is unlikely.

“I do like the idea of having a set of commissioners from different parts of the state to decide the road projects,” he said.

No additional funds for roads or bridges were set aside in the budget, but lawmakers say the state’s infrastructure needs more attention.

Legislators are discussing the possibility of creating a maintenance infrastructure bank, much like a trust fund, as a way to fund maintenance projects.

On the surface, Mr. Thompson said creating an infrastructure bank sounds like a good idea.

“We need to come up with a way to take better care of our roads,” he said. “Having a good infrastructure equals a good economy. You go to some areas and the roads and bridges are falling apart.”

State Sen. Thomas Alexander, R-Walhalla, said no additional funds should be set aside for highway department until the restructuring is completed, adding he is supportive of creating an infrastructure bank to finance maintenance needs.

“It gives us a mechanism for funding projects throughout the state,” Sen. Alexander said. “The longer we put that off, the further behind we get.”

Sen. Bryant agreed more money needs to be aside for road projects, but he said he would be unwilling to raise the state’s gas tax in order to generate additional income.

“I believe we have a $1 billion in new money in this budget,” he said. “Several hundred million ought to be able to go for roads.”

Lawmakers also will be faced with a decision about creating a trust fund for future health care benefits. Currently, the state operates on a pay-as-you-go system. The state’s unfunded obligation for retiree benefits is about $9 billion.

Sen. Bryant suggested setting aside $200 million to $300 million this year and less in succeeding years for the fund.

“We need to be solvent years ahead of time,” he said.

Mr. Alexander said meeting the requirements of the future liability of health care benefits for retirees “goes hand-in-hand with maintaining our AAA credit rating.”

On the education front, Bob Walker, R-Landrum, chairman of the House Committee on Education and Public Works, is pushing a statewide program for at-risk children.

“We want to make the program statewide. It’s unfair if we say we need to be doing something for 4-year-olds in a certain part of the state and not in another,” Rep. Walker said.

The issue of school choice also could get some attention this session. Rep. Walker said his committee will focus on an open enrollment plan to let parents transfer their children to public schools.

The governor’s proposal, however, wants “opportunity scholarships” for parents to send their children to better public or private schools.

Sen. Bryant said he supports school choice and thinks the push for open enrollment is “a step in the right direction.”

Rising worker’s compensation rates also will be addressed again in 2007.

A House committee met for months last year to try to reduce the losses in the system and give businesses a break on premiums. South Carolina has some of the highest workers compensation insurance premiums in the country, which is hampering job creation, according to some legislators.

As for whether the governor and the legislature will enjoy a more amicable working relationship as his second term begins, Senate Majority Leader Harvey Peeler said it’s all in the governor’s corner.

“Mark Sanford has the chance of going down as one of the greatest governors in the state of South Carolina,” he said. “He has that support statewide. Part of the experience I’m trying to help him with is getting along with the General Assembly. … I just hope we calm down this rhetoric. I want to work with the governor. I think it’s really my job to help him accomplish his goals.”

Senate President Hugh Leatherman, R-Florence, said there hasn’t been a willingness on the governor’s part to work with legislators.

“Working with people is like a railroad track,” he said. “It works in both directions.”

Rep. Dan Cooper, R-Piedmont, Chairman of the House Ways and Means Committee, said he doesn’t see the relationship changing.

“He doesn’t seem to want to bend on his side, and that’s a big part of this process,” he said.