Cromer’s Corner -Stimulus Money Dominates Headlines
April 07, 2009
Last week was dominated with talk about whether Governor Mark Sanford will certify South Carolina’s request for almost $2.8 billion in federal money that has been allocated through the American Recovery and Reinvestment Act, or “the stimulus bill.” The majority of the debate has focused on $700 million from the State Fiscal Stabilization Fund that has been allocated to South Carolina to fill state budget gaps in education and public safety.
Below is a synopsis of the events, pulled from a variety of sources, that have transpired recently at the State House related to this weeks headlines.
I hope this helps you to understand a little bit of the chaotic week that has been filled with battling press conferences, public statements, letters to the editor, rallies, and multiple accusations.
Wednesday, March 11
The South Carolina House of representatives passes $6.6 billion state budget, which includes using more than $1 billion in money from the American Recovery and Reinvestment Act. The House budget also included half of the $700 million available to South Carolina through the State Fiscal Stabilization Fund. This is one time nonrecurring money a state can use to shore up budgets that have temporary shortfalls in revenue.
Thursday, March 12
The Board of Economic Advisors met and reduced the estimated revenue available to the General Fund by $64 million, or 1% of the current budget. Since June of 2008, the state budget has been cut by more than $1.1 billion.
Monday, March, 30
Senate Finance Committee held a special meeting to receive an update on the status of the budget process, stimulus money and impact on South Carolina. Senate Finance Chairman, Hugh Leatherman, asks Finance Subcommittee Chairs to work with their subcommittees to build budgets for agencies under their subcommittee that does not include stimulus money. The State Department of Education provided the Senate Finance Committee with their determination of the current fiscal status of school systems across the state.
The question many, including the Senate Finance Committee, are asking relates to the General Assembly’s ability to request the $700 million from the State Fiscal Stabilization Fund if the Governor does not act prior to the Friday, April 3, deadline. The prevailing thought beginning to emerge is that Governor Mark Sanford is the only one that can request the money. Any request made by the General Assembly will not be acceptable.
The Finance Committee requests that Chairman Hugh Leatherman send a second letter to the Governor requesting a meeting to see if there is some compromise that can be reached on the requesting of the stimulus money.
In a speech at Furman University, Governor Mark Sanford indicates that he would request the additional $700 million in State Fiscal Stabilization Fund money if the General Assembly would agree to pay an equal amount toward the reduction of State debt.
Tuesday, March 31
Senate Finance Committee hears reports from Subcommittee Chairman about the impact that further budget reduction will have on state agencies, services provided by state agencies, and people who receive services from state agencies.
Attorney General Henry McMaster issues an opinion at the request of Senate President Pro Tempore Glenn McConnell concerning the General Assembly’s ability to request the stimulus money if the Governor does not act prior to the Friday, April 3 deadline. The opinion states that only the Governor has the authority to request the funds. You can read the full opinion at http://link.smartcommunicator.net?83-656-656-1-8370 It is the opinion under March 31, 2009.
Wednesday, April 1
Senator Hugh Leatherman outlines the current circumstances that are facing the State of South Carolina. Senate Finance Subcommittee Chairs present their reports to the full Senate.
An estimated 1,000 people rally outside the State House both supporting and opposing the Governor’s statements that he will not accept the $700 million of stimulus money that is in questions. The rally lasted for almost an hour with chants of “Just take the money” and “No more debt” competing between speakers.
Governor Mark Sanford and Senate Finance Chairman Hugh Leatherman meet briefly to discuss the current stalemate related to the request for stimulus money. After the meeting the Governor continues to insist that the money be used to pay-down state debt. No apparent progress in made in the debate.
Members of the Senate Finance Committee receive a copy of a letter The Executive Office of the President, Office of Management and Budget sent to Senator Lindsay Graham, on Tuesday, March 31, clarifying the White House’s position related to the State Fiscal Stabilization Fund. In the letter OMB Director Peter Orszag confirms “the Governor must submit an application to the Secretary of Education, and there is currently no provision in the Recovery Act for the State legislature to make such an application in lieu of the Governor for a State’s allocation of the State Fiscal Stabilization Fund.
Thursday, April 2
The Governor holds a press conference further confirming his position related to the accepting of State Fiscal Stabilization Fund money.
The Budget and Control Board meets and imposes 2% across the board cuts equal to $110 million.
Friday, April 3
Media reports indicate Governor Sanford will certify that South Carolina would like to have access to the $ 700 million in State Fiscal Stabilization Fund money and other money available through the American Recovery and Reinvestment Act. This opens the door for the funds to be secured for the state, which would prevent them from going to another state, but additional actions must be taken before the money will be available for appropriation.
Media reports indicate Governor Sanford will not request that the $700 million be made available for appropriations unless the General Assembly budget offered by the General Assembly addresses the state’s debt issue.
Thank you for taking time to read this brief update. You can always find information bills currently being considered by the General Assembly at www.scstatehouse.gov . If I can be of assistance to you, please do not hesitate to contact my office at 803-212-6330 or e-mail me at cromerr@scsenate.org.
Respectfully,
Senator Ronnie Cromer
Senate District 18