S.C. Supreme Court hears stimulus funding dispute

Gov. Mark Sanford refused to request the funding, which is intended to pay for educational and law enforcement programs, unless the state legislature committed an equal amount to paying down the state’s deficit.

However the legislature included the money in next year’s state budget anyway, touching off a showdown that led to spate of legal filings and three separate legal cases. Two of those cases, one filed by students and another filed by School administrators, was remanded back to state court on Monday.

The governor seemed to take that development hard, appearing ready to concede defeat as he spoke with reporters on Tuesday.

“It looks like we will be bound to spend that money,” he said.

Today’s hearing before the state Supreme County began shortly after 10 a.m., with the courts first hearing arguments in the suit filed by Chapin High School student Casey Edwards and University of South Carolina law student Justin Williams.

Immediately thereafter, the Justices heard arguments in the suit filed by the S.C. Association of School Administrators. Petitioners were initially given 20 minutes to present their case, followed by 20 minutes from the respondents. The petitioners were then given 10 minutes to rebut.

The attorney’s outlined their arguments in several documents filed with the court over the past 24 hours.

According to Sanford’s legal team, the stimulus law clearly states the “Governor of a State desiring to receive an allocation shall submit an application.”

His attorney, John Witherspoon Foster of the firm Kilpatrick Stockton, went on to write that the governor maintains the federal law pre-empts a state law that would allow the legislature to apply for the money.

“There are no cases that hold that the Legislature has the power to compel the Governor to apply for and receive federal funds … in short, the decision whether to request funds from the Secretary of Education [From whom the funds would be allocated ] is a quintessential executive function,” Sanford’s brief concludes.

In court, the team’s argument was made by attorney Adam Charnes, a partner with Kilpatrick Stockton, and a former law clerk for U.S. Supreme Court Justice Anthony M. Kennedy.

Charnes argued that the state Constitution bestows upon the governor “supreme executive authority.”

“If that phrase means anything, there is a core residuum of discretionary authority that the governor retains and the legislature cannot interfere with.

“That has to mean something,” he said.

But Chief Justice Jean Hoefer Toal was not moved by the Constitutional argument.

“Doesn’t this all boil down to a big policy disagreement about what the stimulus money should pay for?” she asked. “The governor write to the federal government months ago, saying he did not want to use the money to pay for education or public safety, and that he instead wanted to use it to pay down the debt… and the federal government told him he could not do that.

“Then he told the legislature that he would not accept the funding unless they committed an equal amount to paying down the debt,” she continued. “All he needed to do was have a third of the legislature plus one member go along with him, and he would have gotten his way, but he lost that battle.

“Governor Sanford lost a legitimately engaged in battle under the Constitution of the state,” Toal said. “Isn’t this case all about that loss, and not all these lofty statements about pre-emption?”

Charnes would not yield in his argument.

But Kenneth Childs, attorney for the S.C. Association of School Boards, argued before the court that Sanford is misinterpreting the stimulus law. The state — not Sanford — must request the federal money.

And, in South Carolina, the Legislature speaks for the state on spending issues according to state law and legal precedents, Childs wrote.

“The state you can’t give the governor the money, give him the discretion on how to spend it, and at the same time, honor 200 years of jurisprudence in the stat,” he said.

He also pointed to a number of cases litigated over the past 20 years which he said made it clear that the power to appropriate and spend resides with the legislature not the governor.

But attorney Robert Cook, representing Attorney General Henry McMaster, said the state’s position is to “preserve, protect and defend” the state constitution and “to not allow a federal law to rearrange the internal structure of the South Carolina Constitution and laws.”

That statement, right at the outset of Cook’s presentation, inspired a series of questions by Justice Toal, who noted that the state budget included a clause requiring the governor to accept the disputed funds and that the legislature’s subsequent overriding of Sanford’s veto appeared to settle the matter.

“Is there anything [in S.C. state law] that gives the governor the discretion to avoid the mandate of the state budget bill in such a situation? Is there anything that specifically, directly and unambiguously pre-empts the state’s normal budgetary process?” she asked.

Cook conceded that there was no such provision.

But the admission led to one of hearings moments of levity.

“I got off course here; may I start my speal now?” Cook asked.

“Absolutely,” said Toal. “If you let us go, we’ll take you where we will.”

Taking a breath, Cook began, “This is a very extraordinary situation. There probably hasn’t been a set of circumstance like this anywhere in the country… but that’s not to say that the state’s Constitutional law principles are not very straightforward… the court’s role here, as I see it, is like that of a referee… one that says ‘You will not intrude on the other branch’s space.’”

In his brief, Attorney General Henry McMaster said the court should protect the state Constitution. Case law is clear that lawmakers control the money, he wrote, but the court must decide if the federal Supremacy Clause applies, as Sanford has argued.

“Congress cannot, consistent with the Tenth Amendment, use a funding statute, such as this one, to rearrange the State’s Constitutional structure,” McMaster wrote.

The governor made a similar claim in the suit he filed against the state in federal court.

“All doubt has to be resolved in favor of the state Constitution and the core functions of a state in carrying out its own processes,” Cook said.

The state Supreme Court’s ruling is expected to settle the long running dispute, as the governor has said he will not appeal if the court rules against him.

Justice Toal said the court would do its utmost to accelerate its issuance of a decision in the case, predicting that one would be communicated to the attorneys “within the next day or two.”