An announcement released by the Office of Governor Mark Sanford today explains that “since the White House has denied his request to use stimulus dollars to pay down state debt, he will not be seeking certification of those funds.”
Here is the press release, below:
Gov. Sanford Won’t Seek Stimulus Money
GOVERNOR SAYS IF LEGISLATURE SEEKS FUNDS, OTHER MONEY SHOULD BE USED TO REPAY STATE DEBT
Columbia, S.C. – March 20, 2009 – Governor Mark Sanford today announced that since the White House has denied his request to use stimulus dollars to pay down state debt, he will not be seeking certification of those funds.
Instead, if the General Assembly chooses to seek the funds in his place, he is asking the legislature to use other money for debt repayment so that the state does not dig itself further into a budget hole.
“We’re obviously disappointed by the White House’s decision, because it cuts against the notion of federalism and the idea of each state having the flexibility to act in a manner that best suits its needs,” Gov. Sanford said. “As a result, we will not be seeking the use of these federal funds for the way they put our state even further into an unconscionable level of debt. If our General Assembly chooses to make use of this federal money, we’d ask them to use existing state resources to begin paying down our state’s sizable liabilities. Now is the time to do so, because it will give us more flexibility in addressing future needs at a state level if this economic downturn is indeed protracted. We simply cannot afford to base 10 percent of our state budget on money that will disappear in two years’ time.”
Governor Sanford has opposed the federal stimulus package because he doesn’t believe we should spend money we don’t have, because we shouldn’t pass a substantial bill for today’s government services on to future generations, and because the massive run-up in government spending in time will devalue the American dollar. The Congressional Budget Office has forecast a $1.8 trillion federal deficit for this year – the largest ever – and just today said the President’s budget plan would lead to $9.3 trillion in deficit spending over the next 10 years, a level $2.3 trillion higher than the White House predicted just weeks ago.
The governor sought to use just one quarter of the $2.8 billion coming to South Carolina – about $700 million – to pay for past promises made by state government. Doing so with debt related to education would free up over $162 million in debt service in the first two years and save roughly $125 million in interest payments over the next 13 years – just as paying off a family’s mortgage early frees up money for other uses. A recent study by the American Legislative Exchange Council ranked us 4th highest in the nation for the percentage of annual revenue required to pay debts.
“Speaker Harrell, Senator McConnell and others have expressed support for the idea of paying down debt with stimulus dollars. If the legislature decides to take these funds, we stand ready to work with them and the rest of the legislature in finding ways to accelerate our state’s repayment of debt so that we can free up dollars for other purposes,” Gov. Sanford said.