South Carolina stands to collect $2.8 billion in federal stimulus money, but the state's governor doesn't want all of it. In fact, Mark Sanford rejected $700 million. A lot of it was earmarked to go towards education and public works projects. Later today he will reluctantly sign the request for that money.
His state’s supreme court ruled Thursday he has to take the federal money. Governor Sanford spoke to Kiran Chetry on CNN’s “American Morning” Monday.
Kiran Chetry: Your state has an unemployment rate right now of 11.5%, the third-highest in the country. Also, according to some of the statistics, you have 15% of the people in South Carolina living in poverty, which is the 12th highest rate in the country. Doesn't your state desperately need all the money it can get?
Mark Sanford: Yes, but the question is in what form. I think when you look at the money that was going to come, in this case from the federal government, it came with very serious strings attached. In this case, it would have put us about a billion dollars in the hole 24 months from now. It would have prevented us making changes to the way our state government operates so we would have been on a firmer financial ground going forward. And it wouldn't have allowed us to shore up our finances in what could be a prolonged financial storm. So it came with very serious strings attached.
Chetry: You wanted to use some of that money to pay down the debt and they were not allowing you to do that?
Sanford: Yeah. We said, look, we're fourth in the nation on a per capita basis in our indebtedness. It seemed to us with this kind of windfall, and this money represents the lottery of all lottery wins for the state governments across the country, that it would be prudent to set some money aside. If a family won the lottery they wouldn't just go out and spend it all, they’d put some money aside for a rainy day, for paying down the credit card balance or paying off the mortgage and I don't know why state governments should be exempt from that same principle.
Chetry: It was actually some students and education officials that filed these lawsuits. One of them was an 18-year-old student by the name of Casey Edwards, a high school senior now going on to attend Duke. They were very concerned because they were saying it would have been teacher layoffs, etc., and that that $185 million will now go to prevent those things. Isn't it a good thing in terms of making sure teachers can get paid and layoffs prevented, since you are dealing with the third-highest unemployment rate in the nation?
Sanford: It's a longer conversation on the unemployment rate. We are the ninth fastest labor force growth in the United States of America. So one of the ways to lower the unemployment rate is to leave the upper northeast or “The Rust Belt;” load up the kids, load up the U-Haul, and say "we're out of here." That's a way of lowering your unemployment rate. We happen to have a lot of people entering our state and there’s an absorption number that sort of skews our numbers. But without challenging the number, let me say this, the court case that was brought was still predicated on, again, we've got to spend more money on education. I don't think dollars in education are the only cure to having a great educational system.
The question was can we make sure those dollars going to the education system actually go to teachers and actually go to classrooms, which is the front line of learning in the educational process. We will go this year in South Carolina from spending 3.3 to $3.5 billion, even without the stimulus money, on education in South Carolina. The tug-of-war all along in our state has been can we actually make some restructuring changes so less money is trapped in the administration, less money is trapped in outdated programs that no longer work and put that money into, again, the front line of education or law enforcement or a whole host of other services in our state. That's what the battle line was about. Holding some money back and paying down debt we thought to be eminently financially sensible rather than just taking the money and spending it and leaving in place a whole host of programs that in many cases don't work.
Chetry: You’ve basically become the nation's staunchest critic of the stimulus, the only governor to go to court over control of the money. Some conservatives are saying it positions you well for a presidential run in 2012. What's your response that some of this has to do with your political future?
Sanford: Well, you know, those who are critics say you're just doing it for that reason. What I would say in response is, give me a break. Look at the last 15 years that I've been in politics. When I was in Congress and turned away federal money nobody said I was running for president. I’ve got – you can call them zany, you can call them crazy, I call them principled – a long history of voting or acting this way when I think something is fundamentally skewed. When you look at the federal stimulus package and what you were just reporting on, stimulus money not producing the jobs the administration originally claimed, what I see is disastrous federal policy that will encumber the very students at schools across South Carolina right now with a mountain of debt they will be digging out of for a very, very long time.
Chetry: By the way, are you considering a 2012 run for president?
Sanford: No, I'm considering, you know, can I make it through this next week. Given today, can I make it through the day in terms of getting all the paperwork signed in what the [South Carolina] Supreme Court has now compelled with regard to us accepting this money. Again, something we think will prove to be both a mistake from the standpoint of restructuring that made in South Carolina and a mistake from the standpoint of federal finances I think will not be solved in issuing more debt to solve a problem that was created by too much debt. I'm focused on here and now. And as chairman of the Republican Governor's Association focused on a bunch of seats coming up in 2010.