Governor Sanford Tells Obama Bailouts A Bad Idea

While many other state governors are asking the federal government for financial help, South Carolina Gov. Mark Sanford wants none of it for his state. In a letter to president-elect Barack Obama, Gov. Sanford wrote, "We don't believe economic problems that were in large measure created by too much debt will be solved by more debt."

He and the 49 other governors met with Obama Tuesday in Philadelphia to talk about the economy and federal economic recovery efforts. Sanford spoke to reporters in his office in Columbia Wednesday about the meeting.

"If economic stimulus was as easy as simply cutting a check out of Washington, D.C., we'd never have downturns. We'd never have recessions," Sanford said.

The governor's remarks came as economists from the University of South Carolina were predicting that South Carolina's economy will be even worse next year. At its annual Economic Outlook Conference, USC economist Doug Woodward said he thinks the state will lose 22,000 jobs next year and the unemployment rate will rise to 8.6 percent. The state's unemployment rate is already 8.0 percent, the highest in 25 years.

What's surprising, though, is that he doesn't think the state has felt the full effects of the recession yet. The state has had to cut $621 million from this year's budget, but Woodward says most of that can be attributed to the state's elimination of the sales tax on groceries last year. State sales tax collections are down by hundreds of millions of dollars.

"It's going to be a double whammy," Woodward says. "We already got hit by the tax reform and the tax changes that have been going on, and now we're going to get hit by the downturn in the economy, which we're about 6 to 8 months behind, it seems, the rest of the nation, just unfolding here in terms of a recession."

But Gov. Sanford says he's always in favor of cutting the tax burden on citizens. He blames increased state spending, not the lost sales tax revenue, for the budget shortfalls. He says he has no desire to restore the tax and legislative leaders say they don't either.

If the economists' predictions are true, next year's state budget will be even leaner than this year's, meaning more cuts to state services. State education superintendent Jim Rex says he'll ask state lawmakers in January to give the state department and local school districts more flexibility so they can look for creative ways to protect essential services.

"We know that if we start losing teachers the size of classes will go up. We know that's detrimental for education," Dr. Rex says. "So there aren't a lot of good choices left anymore."

He'll also ask lawmakers to look at the state's tax structure and the way schools are funded.

Gov. Mark Sanford has been working on his executive budget for next year. While he doesn't want to raise taxes and doesn't want federal money, he won't say where he would cut the budget further. "I'm not going to preview the budget now," he says. "Tragically, there'll be some of those past-muscle-and-right-into-bone cuts in our budget."