WASHINGTON - A federal judge yesterday ruled that two lawsuits related to South Carolina's use of federal stimulus funds must be heard in the state's Supreme Court, dealing a blow to Gov. Mark Sanford's hopes to have the cases heard in federal court.

Federal Judge Joseph F. Anderson Jr. heard oral arguments yesterday before issuing the two-paragraph order. Sanford had asked that the cases be heard in federal court last week.

The lawsuits against Sanford and the state, one filed by two students and the another by the South Carolina Association of School Administrators, are similar and revolve around the legality of the so called Clyburn Amendment in the American Recovery and Reinvestment Act of 2009, which permits state legislatures to draw down federal stimulus funds for job creation and economic growth if their governors refuse to do so.

Anderson did not rule on a third lawsuit, Sanford v. McMaster, in which the governor claims the legislature violated the separation of powers clause in the state's constitution by adopting a concurrent resolution that the funds be used for education and other purposes.

The governor's office yesterday issued a statement after the rulings saying that Sanford will not appeal the state Supreme Court's decision and will comply with it.

Sanford has repeatedly tried to direct federal stimulus funds to pay down state debt. He petitioned the Obama Administration after the stimulus act passed in February. He vetoed the legislature's fiscal 2010 budget, which included stimulus funds. The legislature then overturned his veto.

Oral arguments will begin tomorrow before the state Supreme Court, according to sources.

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