COLUMBIA, S.C. - With South Carolina being hammered by the recession striking the nation, Gov. Mark Sanford on Wednesday implored lawmakers to spark the state's economy by cutting income and business taxes, capping state spending and giving parents more choices in where their children go to school.
The Republican governor known for run-ins with the GOP-dominated Legislature sounded a conciliatory tone in reflecting on economic problems that have slashed $1 billion from state spending in the past several months, but still laid the blame at the feet of lawmakers he's long accused of spending too much.
The governor already has proposed an austere, $5.8 billion spending plan for the next fiscal year that would close some college campuses, furlough state workers and require that retirees pay higher health insurance premiums.
"Though people will be hurt, there's nothing that we can now do about what didn't happen in the way of fiscal restraint in Columbia, and so we simply gotta look forward. Our differences are in the past, and from my perspective, bygones are bygones - and all that matters from this day forward is looking forward," Sanford said.
He described the economic problems facing the state budget, affected because fewer taxes are being collected, as an opportunity to bring change and make the state more attractive to business. He also continued what's become his mantra of railing against bailouts being considered by lawmakers in Washington, saying such spending will burden South Carolina and the rest of the nation with debt. But the governor did give a nod to next week's historic swearing-in of President-elect Barack Obama - an event that caused Sanford to move up his own annual speech on the calendar.
"As an American I would wish this new administration every success in deliberately working through so many of the challenges that face our country, but as a South Carolinian I would simply ask that we take up this mantle of, 'Yes, yes we can' in confronting so many of the problems that do face our state," he said.
Sanford's tax cut proposal would comes on two fronts: phasing out the corporate income tax and offering an optional flat income tax for individuals.
He would pay for the business tax break by eliminating some economic development incentives and tax exemptions, which he contends penalize existing business in the rush to lure new companies to the state.
"Too often if you're a big business you get the red carpet rolled out for you, but if you're a little business you get nothing," Sanford said.
On the income tax break, Sanford wants to raise the state's cigarette tax - the nation's lowest at 7 cents - to 37 cents per pack and by increasing landfill dumping fees that currently are attracting out of state dumpers to bring their track to South Carolina.
By raising those collection, Sanford would pay for a 3.6 percent rate for taxpayers who choose to forego deductions. Otherwise, they could keep paying the state's maximum rate of 7 percent with deduction.
Sanford told reporters earlier Wednesday that the break would help the state bring in retiree residents who often don't have large deductions to write off on their income taxes.
The governor pressed for charter schools to get better funding and reiterated his desire to offer taxpayer funded tuition for private schools
"If you can afford the right house in the right neighborhood in the right school district, you can get absolutely fabulous public education in South Carolina or for that matter, you can get private education. The choice literally is yours. But if you can't afford that right house in the right neighborhood in the right school district, you're mandated to attend a certain governmental school in your district," he said.
The governor accused lawmakers of growing state spending by 40 percent, and said spending plans should be limited to a formula involving population and inflation. More money is meanwhile needed to pay down $20 billion that will be needed by state retirees that cannot be met with current investments, he said.
"We are heading toward a disaster on the retirement side given unrealistically optimistic return projections," he said. "What's happening here I believe is near criminal."
The governor also pressed for government restructuring, including asking lawmakers to save money by changing how some agencies are structured and to allow some constitutional officers to be appointed, rather than elected. The lieutenant governor, for example, can come from an opposing political party. He also backed legislative proposals to increase the ability of the public to see how lawmakers are earning money.
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