Governor Refusing Education Stimulus Funding

Last Updated: May 05, 2009

This article appeared in the April 2009 Rural Policy Matters.
South Carolina Governor Mark Sanford is refusing to use $700 million in federal stimulus funding for schools and other state agencies to avoid budget cuts and layoffs. The funding is part of the State Fiscal Stabilization Fund, a portion of the American Reinvestment and Recovery Act that governors must request. Much of that funding is intended to be distributed to schools through the state’s funding formula.
Sanford has twice asked the Obama administration for permission to use the funds to pay down the state’s debt instead of directing much of the money to schools as specified in the law. Both times he has been turned down. 
Sanford now says that although he requested the full stimulus amount available to the state, not all of the funds will be used unless the South Carolina legislators find ways to reduce debt in equivalent amounts by cutting the state budget. Opponents of that plan claim it runs counter to the intent of the stimulus funding – to maintain programs and avoid further layoffs. Without stimulus funding the state expects some 3,000 public school teachers would be put out of work.
Sanford’s stance is controversial even within his Republican party and Sanford accused fellow Republicans of writing a “chaos” budget.
Legislators have rewritten the budget to include the stabilization funds and inserted a budget amendment to compel the governor to accept the funding. The $700 million is the final portion of South Carolina’s roughly $8 billion share of federal stimulus money. South Carolina’s U.S. Rep. James Clyburn supports such a move. Clyburn has taken Sanford to task publicly for his position since the federal stimulus legislation was first crafted, and he even included a provision in the bill to help South Carolina circumvent Sanford’s promised opposition to the funding. 
Sanford has suggested a number of cuts to education, among them a  recommendation to  consolidate many of the state’s school districts, a move he claims will save the state $21 million. Sanford has been an outspoken critic of public education and proponent of privatization efforts including tax credits for private schools and various choice measures.   
Public outcry over the potentially lost federal funding led to an April 2nd rally and a march on the State House. 
James M. Holloway, Chairman of the Board of Saluda School District One, spoke at the State House rally in support of the $700 million stimulus payment. Holloway represented the South Carolina Rural Education Grassroots Group, a statewide network of rural community activists and organizers who are working to improve rural schools through local and state policy work. The group represents 19 rural counties.  
In his remarks, Holloway implored, “Governor Sanford, I ask you to think of others when making your decision about the stimulus money. Governor, we are responsible for the children, all of the children.” Quoting the Ina Hughes poem, “We are Responsible,” Holloway continued, “We are responsible for children, for ‘those who want to be carried and for those who must’ be carried. Governor Sanford, take the money.”
Within two weeks of the rally, a Chapin High School student filed a lawsuit asking the South Carolina Supreme Court whether lawmakers can force the governor to accept the stimulus money. The state’s highest court said that it would not hear the lawsuit because the legislature had not yet included plans to spend the money in its budget. The rewritten budget, which faces the Governor’s veto power, will likely bring the issue back to court.
New and Long-Standing Problems  
The governor’s stimulus refusal is the latest in a long series of challenges to public education and rural schools specifically. The Abbeville school funding ruling is on appeal to the State Supreme Court. That ruling found that the state is only obligated to provide a “minimally adequate” education and its only order was for the state to fund pre-kindergarten programs for low-income children in the plaintiff districts. Even those programs are severely under-funded and serve only a portion of eligible students.
A petition drive for legislation to amend the constitutional education clause is underway at
State Superintendent of Public Instruction Jim Rex has announced a “Begin in ‘10” campaign for comprehensive tax and funding reform. In 2006, the state “swapped
 its revenue stream for public education from one based primarily on property taxes to one based on sales taxes. The system locked in property tax rates, reinforcing revenue disparities for rural districts with low property wealth and severely restricting their capacity to raise revenue to meet even basic financial obligations.
Ongoing efforts to support various school privatization and choice efforts are also underway, including a private school tax credit bill and a public school choice bill. The education reform group RISE SC is mounting a counter offensive in support of public education.
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Read more from the April 2009 Rural Policy Matters.