WASHINGTON — South Carolina Gov. Mark Sanford gave no indication yesterday whether he would accept $700 million of federal stimulus aid and accused state lawmakers of exaggerating the need for the funds.

The governor last month made a pitch to use the $700 million — which the state is slated to receive from the $48.6 State Fiscal Stabilization Fund under the new stimulus law — to pay down state debt or help fund the state’s pension plan. But officials from the Obama administration told him that the funds could not be used for that purpose, leading Sanford to say he would reject the $700 million.

Sanford’s stand has been unpopular with legislators who claim the state needs the money.

The governor met with state senators in Columbia yesterday to discuss the issue. At that meeting, Sanford pointed out that the state would receive $578 million of other stimulus funds for Medicaid reimbursements that would free up state funds for other purposes. He accused the Senate Finance Committee of wrongly excluding those funds from its initial budget calculations and overstating the state’s funding needs. The $578 million is included in the House version of the budget, the governor noted. The House passed a fiscal 2010 budget on March 11.

The Senate Finance Committee had estimated that 6,000 to 7,000 government jobs would be lost without the $700 million of aid Sanford wants to reject.

Joel Sawyer, a spokesman for Sanford, said after the meeting yesterday that the committee’s estimates are “scare tactics” and the governor is ready to work with the legislature to pay down state debt.

But Sen. Hugh K. Leatherman Sr., R-Florence, chairman of the Finance Committee, said Sanford “makes my blood boil” because his version of the budget would cut education spending by 7%. Without the stimulus money, “this state will be set back for a generation,” Leatherman said.

In a press conference after the meeting, Sanford and the senators argued over the deadline for receiving stimulus funds.

The law states that governors must formally accept or reject funds from the stimulus measure’s fiscal stabilization fund by today — 45 days after the bill’s enactment.

But Sen. Thomas R. Davis, R-Beaufort, Sanford’s former chief of staff, said the law permits a governor to accept the funds at any time during the two-year life of the program.

House Speaker Robert W. Harrell Jr., R-Charleston, disagreed, saying April 3 “is the hard deadline” for the governor to accept or reject the funds. After April 3, Sanford “will have shirked his responsibility to the taxpayers of our state, and according to the law, money originally meant for our state will be sent to other states, and South Carolinians will still be required to repay this money,” Harrell said in a statement.

On Tuesday, Obama administration officials told U.S. Sen. Lindsey Graham, R-S.C., that only governors could accept funds from the $48.6 State Fiscal Stabilization Fund. South Carolina is set to receive the $700 million from the fund over two years. The decision roiled South Carolina lawmakers who had assumed that a provision inserted in the stimulus law by U.S. Rep. James Clyburn, D-S.C., would allow state legislatures to accept stimulus funds if a governor declined them.

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