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Mulvaney: ‘Strings attached’ to funding

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By Chris Sardelli

Sen. Mick Mulvaney spent a good part of this week on the State House floor debating the merits and disadvantages of accepting money from the federal stimulus bill.

Mulvaney, R-District 16, joined fellow state lawmakers in discussing how Gov. Mark Sanford’s refusal of money from the stimulus bill would affect the state’s budget.

Sanford has refused a portion of the funding the state was to receive, around $700 million, which would be allocated for kindergarten through 12th-grade education, higher education and health care.

The state has already accepted, and has begun allocating, about $2.1 billion in stimulus funds. It’s being used for infrastructure needs, such as roads and bridges.

In total, the state should receive around $8 billion from the American Recovery and Reinvestment Act of 2009, with $5.2 billion of that funding set aside for tax credits. The money will be awarded in phases over  two years.

Sanford said he would accept the $700 million in stimulus money, but only if the Legislature uses it to pay down the state debt.

The deadline for accepting the money is today, though Mulvaney said the money would not be immediately reallocated to other states if Sanford doesn’t accept it.

Mulvaney said that laws associated with the stimulus act would allow Sanford two years to reapply for the funding.  

Mulvaney does not agree with the governor’s position, but he has concerns about the $700 million  as well.

He would like to use the money to give tax credits for job creation. He said using the $700 million the way it is allocated would not be as useful to the state’s economy.

“There’s no stimulative affect, it doesn’t create jobs and that’s what we need more than anything else,” Mulvaney said. “Also, there’s strings attached to it.”

Mulvaney said these strings are conditions placed on the state if it accepts the money. He said if the state accepts the $700 million, which would be split over two years, the federal government would establish rules on how it could be spent.

Mulvaney believes this may “open the door” for the federal government to tell the state how to spend the money in its general fund, now about $5.5 billion.

As a result, he said, funding that was promised to local governments could be reallocated somewhere else.

“If we take this, we have to follow federal rules on how we spend,” Mulvaney said. “There is a direct connection then between the stimulus funds and possible cuts in local governments.”

Mulvaney is also concerned about the uncertainty associated with the stimulus bill.

Mulvaney said he’d like to know the exact amount of funding the state is set to receive, before he decides how to vote on the use of this $700 million.

“It’s frustrating because they’re asking us to vote on something that keeps changing,” he said.

Willis, Moore worry about refusing stimulus funds

Lancaster County Administrator Steve Willis said refusing the money could impact the county’s budget, including significant cuts to the local government fund.

“The state budget is way out of whack,” Willis said. “The state budget usually anticipates getting more funding. So no matter which way you look at it, the state budget is out of whack by $700 million.”

Willis said there are two areas that would probably be hurt the most if the stimulus funding is refused – education and public safety.

“Both would get massacred, as well as some health insurance stuff the state does,” Willis said. “I’ve been following along to see which news is going to affect us.”

Dr. Gene Moore, superintendent for the Lancaster County School District, said the district would suffer significant harm if the stimulus money isn’t accepted.

Moore said the district could be shorted $5 million this year is the $700 million isn’t accepted.

“This would be extremely dramatic,” Moore said. “Funding is a challenge to begin with, and with the economy the way it is, every school system is facing that. But this would be devastating to the school system.”

The biggest impact to the school district would be staff salaries, Moore said. Almost 88 percent of the district’s operating budget goes to salaries and benefits.

“We’d do everything in our power to minimize the impact in the classroom, but a cut of that magnitude will impact the classroom,” he said. “It’s of great concern to all of us. To lose that kind of funding, I don’t know how we’d handle that, especially when we’re trying to provide quality education.”

Moore said he will be attending a superintendent meeting in Columbia to discuss the issue and look at the impact on schools if the funding is refused.

“We obviously have been in communication with our legislative folks and have been urging them to do everything they can,” Moore said. “This is not just a Lancaster County issue, this is a South Carolina issue as well.”

Contact reporter Chris Sardelli  at csardelli@thelancasternews.com or at (803) 416-8416