South Carolina High Court Rules Against Governor in Stimulus Case

WASHINGTON — The South Carolina Supreme Court ruled unanimously yesterday that Republican Gov. Mark Sanford must use $694 million of federal stimulus funds to be received by the state for education, ending a months-long battle between the governor and the legislature.

Calling the ruling “terrible news for every taxpayer in South Carolina,” Sanford said he will abide by the decision and request the stimulus dollars for education.

The ruling forces the governor to implement the state’s budget, which was approved by lawmakers last month with the stimulus funds included for education. Sanford vetoed the budget, saying he would only use the stimulus funds if they could be used to pay down state debt. But the General Assembly voted to override his veto on May 21.

The high court’s ruling came one day after it heard oral arguments in two lawsuits against Sanford and the state. One was filed by two students and the other by the South Carolina Association of School Administrators; both asked that Sanford be forced to use the stimulus funds for education.

Sanford had argued that American Recovery and Reinvestment Act of 2009 grants governors the sole responsibility for allocating the federal funds. The General Assembly’s attempt to spend that money violates the separation of powers clause in the state’s constitution, he said in documents filed with the court.

But the court ruled that General Assembly has the sole authority to direct appropriations and “decides whether the state receives the funds.”

“At this stage in the process, the governor certainly has no discretion to make a contradictory decision on behalf of the state,” the court said. “We hold the governor must apply for the [state fiscal stabilization] funds,” it said.

The court declined to base its decision on the Clyburn amendment that was added to the federal stimulus law to give state legislatures the ability to accept and direct the spending of stimulus funds if governors decline to do so.

The two students had argued in their suit that the Clyburn amendment gives state legislatures the authority to accept and direct stimulus funds under a concurrent resolution. U.S. Rep. James Clyburn, D-S.C., persuaded Congress to include the amendment into the ARRA anticipating Sanford’s objections.

If the court had sided with the governor, the legislature would have had been forced to rewrite the budget without stimulus funds. Now, the state’s budget will have to be implemented by Sanford when the new fiscal year begins on July 1.

The governor’s legal team last week tried to move the cases to federal court, arguing that the ARRA involved federal law. A federal judge ruled on Monday that the cases be remanded to the state Supreme Court.

Sanford, an outspoken deficit hawk, had opposed federal assistance for states before the stimulus act passed, saying he didn’t want South Carolina to “dig itself further into a budget hole.” At least five other Republican governors have said they would refuse a portion of their state’s funds.

Sanford said at a press conference after the ruling that South Carolina’s government structure “impedes and hurts” progress in the state.

“What [the ruling] really underscores is in South Carolina, we don’t have two branches of government, we have one — the General Assembly,” he said.

Sanford’s second term as governor ends in 2010 and he cannot run again under term limits law.

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