Sanford said he is "asking the legislative branch to go back to the drawing board with regard to this year's budget."
But legislators said they would easily override his vetoes rather than leave the state with no money to operate schools, health care or prisons. A lobbyist for the state's school systems said it was unrealistic to start over given deadlines to operate in the new school year.
Sanford called the spending plan "fundamentally flawed" because it relies on $350 million in federal bailout cash and accused legislators of trying to "usurp" his authority and force him to request the money. He criticized behind-the-scenes work on the final spending bill that left legislators with little time to review or debate a budget that ultimately avoided cutting government and could generate a $920 million budget hole in two years.
By nixing the state's receipt of $350 million, mostly for struggling schools, the Republican continued his long-running opposition to the bailout money on the grounds it increases the nation's debt and devalues the dollar. His critics, including leaders of the GOP-dominated Legislature, say Sanford is seeking to raise his national political profile at the expense of the schools.
Teacher layoffs are in the works, and colleges predict tuition hikes. Lawmakers expect to override Sanford's vetoes, but concede the issue over control of the money may be decided in court.
In essence Sanford vetoed the parts of the budget dealing with spending. Sanford said he had no choice because the part of the budget that would spend the stimulus cash was too closely linked to the rest of the budget. Leaving the non-stimulus part intact would have been the same as advocating cuts in public education, he said.
But vetoing all the spending was worse and full of political consequences, legislators said.
"You can tell every school child in South Carolina that the governor of South Carolina voted for you to not have any education," said Senate Minority Leader John Land, D-Manning. "You can tell every sick person that the governor voted for them not to have any medical care."
"It puzzles me as to why this governor would just love to have no government - and that's what he tells me if he vetoes all the money," Senate Finance Committee Chairman Hugh Leatherman, R-Florence, said.
Legislators relied on the stimulus cash to resolve budget problems tied to economic turmoil.
As the economy soured, the $7 billion budget for the current fiscal year was slashed by more than $1 billion, costing most state's agencies 15 percent or more of their spending.
The $5.7 billion budget approved by lawmakers called for Sanford to request $350 million in federal stimulus cash in five days. Sanford Tuesday wouldn't rule out legal action over that. Meanwhile, a Chapin High School student is preparing to refile a lawsuit that could force Sanford to seek the money.
Without the stimulus cash, half the state's agencies would see an additional 7 percent budget cut. The Department of Public Safety says it would lose $15 million and have to reduce the number of troopers on the state's roads and the state's prison system would lose $22 million.
Apart from the stimulus cash, the budget calls for using more than $430 million in federal cash tied to Medicaid to head off severe reductions in programs ranging from care of autistic children to hospice services.
But the biggest sticking point has been the $700 million in federal money intended to spare the state's schools and colleges from deeper budget cuts over two years.
South Carolina programs and agencies stand to get up to $2.8 billion from the $787 billion federal stimulus law during the next two years. But Sanford has insisted the $700 million under his control should only be used to reduce state debt, a plan the White House has twice rejected.
The budget proposal called for $185 million in bailout money for public schools. Without the cash, school districts are expected to cut 1,500 teaching jobs and colleges have said they'll be forced to raise tuition by more than 10 percent.
Sanford called on legislators to rewrite the budget, something that the state's schools don't think can be done in the time they have to set budgets.
For instance, the deadline for offering teaching contracts expired last week and districts need to make decisions as soon as possible. "I think it's unreasonable and I think it's unrealistic," said Scott Price, a lobbyist for the South Carolina School Boards Association.
Sanford was irked that legislators trampled on his authority.
"This is an unusual and unprecedented step forward in the degradation of the balance of power that is vital to a functioning government," Sanford said.
Now it will be up to Sanford to rally allies to help his vetoes stand in the House on Wednesday and then in the Senate. He briefed his allies in the Legislature before releasing his veto message, gathering at best a couple of dozen of the General Assembly's 170 members in an office next to his.
Legislators point out that Sanford persistently fell short of the numbers needed to sustain vetoes throughout the budget debate.