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Governor says budget has unconstitutional deficit
5/14/2008 12:19 AM

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COLUMBIA (AP) -- The $7 billion state budget being hashed out by lawmakers involves plans for deficit spending that violate South Carolina's constitution, Gov. Mark Sanford said Tuesday.
Already the state Corrections Department and state Education Departments have said they'll be short on cash next year and will have to run deficits. Prison officials said they'll shutter minimum security facilities and the state-run school bus operation will be short on cash to buy fuel.
"It's a huge problem," Sanford said. "It's not balanced and you have a balanced budget requirement. That's our constitutional requirement."
The governor heads the Budget and Control Board, which on Tuesday delayed action on allowing the state Corrections Department to run a $4.3 million deficit for the current fiscal year -- a shortfall brought on by rising food, fuel and medical costs.
After the meeting, Sanford said something that might have been tolerated in other years but now is being discussed openly. During the Budget and Control Board meeting, Sanford pointed to transcripts where Senate Finance Committee Chairman Hugh Leatherman spoke about the Corrections Department running a deficit during the next fiscal year.
In an April 2 meeting, the transcript Sanford's office provided shows Leatherman three times talking about the department operating with a deficit expected from a lawsuit decision. If "they need to use more of their funds and go to the board and ask to run a deficit that's all they gotta do," Leatherman says.
Sanford called the statement an acceptance of deficit spending. In "saying you can run a shortfall, we are shirking that which we are constitutionally required to do and creating bigger holes for the following year," the governor said.
Sanford said he'll look at the legal implications but didn't know if he'll raise a legal challenge. Leatherman did not immediately return a message seeking comment.
Sanford blamed the prison system's problems this year on the legislators for overriding a budget veto last year. Legislators had required the Corrections Department to take more inmates from county facilities although the agency wanted limits on how those transfers take place after convictions. Sanford said that cost the Corrections Department $1.2 million.
Leatherman, one of the Budget and Control Board's five members, asked during the meeting to delay a decision on letting the agency operate in the red.
"We need to make sure we've got a true deficit," Leatherman said, noting questions Treasurer Converse Chellis raised about the agency's spending on employee pay and benefits. Leatherman said the agency's finances need more scrutiny before any conclusions can be drawn about whether the $1.2 million inmate transfer issue played a substantial role in the deficit.

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