Senators were in the third day of surprisingly reserved budget deliberations when Sens. Vincent Sheheen, D-Kershaw, and John Kuhn, R-Charleston, introduced legislation that would use $130 million in expected surplus this year to pay off a large portion of the state's $155 million debt.

The move was in response to Gov. Mark Sanford's call Monday for the Senate to adhere to South Carolina's constitution and pay off the debt while money is available.

After an attempt to kill the measure failed, senators adjourned debate for the evening, giving both sides time to cool off. They are scheduled to continue budget deliberations today at 10 a.m.

If the measure passes, the state's budget would be badly out of balance. The proposal, along with a decision earlier in the day to not sell off some $15 million in property, would leave a $145 million hole in the document passed out of the Senate Finance Committee.

Finance Committee Chairman Hugh Leatherman, R-Florence, took the floor late Thursday and in somber tones warned his fellow senators what they faced if the surplus is used to pay off debt.

"If y'all think that's what the people of this state deserve, then we will do it," he said. "But when you look at those teachers in classrooms, when you look at the elder-|ly in nursing homes, when you look at Corrections and the problems they are having, you will know the part you played in that."

Last year, the Senate took three weeks to finish the budget. This year, it seemed to be moving more quickly, but Thursday's action could signal an end to the decorum that had ruled this week.

Last month, the Finance Committee approved a $16.7 billion budget, $5.3 billion of which is state-controlled money. The budget gives state employees an across-the-board 3 percent raise, fully funds the state Conservation Bank, increases the budget of the state Department of Natural Resource and avoids cutting the budget of the Department of Corrections.

There are a number of plans already in play in the Senate addressing the deficit, including certain parts of Sanford's altered income tax reduction plan.

The Finance Committee passed Sanford's plan to the full Senate after making some changes.

Originally, the plan called for reducing the state's highest income tax bracket by .225 percentage points annually for the next 10 years, dropping the rate from the current 7 percent to 4.75 percent. The cut would not occur unless the state's general fund grew by 2 percent or more, based on projections by the Board of Economic Advisors.

Senators amended that plan, pushing the trigger to 4 percent. The first 3 percent would go to paying back old debt over the next few years, part of which is the deficit.

Should that bill fail to pass, senators have the option of passing the Fiscal Discipline Act on its own. The act, already passed by the House, stipulates that the state must pay back the deficit by the summer of 2006. The act, however, would not take effect this year.

Sanford has said the time to pay back the debt is now, while the state has money. At risk, Sanford said, is the state's Triple-A credit rating, which saves South Carolina millions of dollars in future borrowing costs.

"The governor has said all along that this unconstitutional deficit needs to be taken care of as quick as possible," said Sanford spokesman Will Folks.

But many senators, including Leatherman, say it is foolish to pay off the debt when it means cutting services.

On Thursday, Sheheen said it is time to deal with the state's debt. If that means services will be cut, so be it.

"You don't just float around and put Band-Aids on things, like we've been doing," he said.

Sheheen is one of several senators, most of them Democrats, who hope to push through some form of a cigarette tax increase. If the budget is out of balance, then such a measure could save the day.

But according to Senate President Pro Tem Glenn McConnell, R-Charleston, such a plan will never work.

"It won't pass in the House, it won't pass in the Senate," McConnell said.

Also Thursday, senators approved a nonbinding statewide referendum for November. The referendum asks voters whether they would favor increasing the state's sales tax to provide property tax relief.

"It's amazing," said the bill's sponsor, Sen. David Thomas, R-Greenville. "I've been working on this for weeks. Finally, we can hear what the people of this state have to say about this."

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