White House Backs Sanford on Stimulus:

Yesterday, the White House acknowledged that state governors, not state legislatures, control the acceptance and disposition of stimulus money. The AP reports:

South Carolina Gov. Mark Sanford has won a key victory in his fight to control $700 million in federal stimulus money intended to help the state's schools, with the White House acknowledging in a letter released Wednesday that state legislatures can't overrule governors who don't want the money.

White House budget chief Peter Orszag said there is no provision in the stimulus law for state lawmakers to accept that money without approval by the governor.

Sanford, a Republican, has said he may decline some of the state's $2.8 billion in stimulus money because the White House won't let him use the cash to pay down his state's debt, including bonds and looming retirement system liabilities. South Carolina started the fiscal year with $8.1 billion in total bonds outstanding, according to the state's comptroller.

The White House remained critical of Sanford's position, disagreeing with his decision to reject a portion of the stimulus funds allocated for his state, but acknowledged his authority to reject the funds.

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Gov. Sanford Sues Legislature:

The South Carolina state legislature passed a budget purporting to require Governor Marc Sanford to accept $350 million of federal stimulus money. Governor Sanford has responded by filing suit against the state legislature. According to The State:

Sanford said the case is about power, not money, and who will have it.

“This is not about the vetoes, and it’s not about the stimulus,” Sanford said. “What this case is ultimately about is balance of power in this state.

“This is about the larger question of why have a governor if their hands are constantly tied?”

Sanford had refused to accept the money unless the state pays off an equal amount of debt, something state lawmakers said they could not afford to do this year because the state has cut $1 billion from its budget. The budget, approved Wednesday, requires Sanford to accept the money within five days.

Lawmakers, the governor said, have overstepped their authority and tried to rewrite federal law.

But members of the GOP-controlled General Assembly said the Republican governor has lost the debate and it is time to move on. Otherwise, a July 1 deadline from the U.S. Department of Education means South Carolina could lose a portion of its stimulus money, they said.

Here is the complaint. Meanwhile, a second suit has been filed against the Governor to force him to accept the money.

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S.C. Stimulus Fight in Federal Court:

Today a federal district court in South Carolina will hear arguments from attorneys for South Carolina Mark Sanford that litigation over whether the state legislature can force the acceptance of federal stimulus money over the Governor's objection should occur in federal court. Two other lawsuits have already been filed against Governor in state court seeking to force him to accept the money. These suits would be put on hold in state court if the federal court agrees to hear the case.

Why does Governor Sanford want this case to be heard in federal court? One reason is that the litigation turns on an application of federal law, specifically the stimulus bill. Under the stimulus, the Governor argues, the Governor has the authority to accept or reject funds. As the Governor argues in one of his briefs to the court:

the central legal issue in these three cases is whether the General Assembly may use a state law to transfer Governor Sanford’s discretionary authority under a federal law to itself. That issue, which is one of federal preemption, is controlled by the United States Supreme Court’s decision in Lawrence County v. Lead-Deadwood School District, 469 U.S. 256 (1985). In Lawrence County, the Supreme Court held that when the federal government grants a specific entity of state or local government discretionary authority over the use of federal funds, any attempt by a state legislature to dictate through state law how that federal money is spent is preempted by federal law.
This federal question, the Governor argues, gives the federal court jurisdiction to hear the case.

Another reason for wanting this case to be in federal court is that the South Carolina Supreme Court may be too inclined to side with the state legislature, in part because it's the state legislature that elects them to office. Article V of the South Carolina Constitution provides:

The members of the Supreme Court shall be elected by a joint public vote of the General Assembly for a term of ten years, and shall continue in office until their successors shall be elected and qualified, and shall be classified so that the term of one of them shall expire every two years. In any contested election, the vote of each member of the General Assembly present and voting shall be recorded.
There is no bar on successive terms, so each member of the Court could seek reelection before the state legislature again. Given what's at stake, it's understandable why the Governor would think the state Supreme Court might not be the most neutral forum. Indeed, I'm inclined to think the case for recusal of the state Supreme Court's justices is stronger here than in Capterton v. A.T. Massey Coal, but if the state Supreme Court were to take the case, I doubt any of the justices would in fact recuse.

UPDATE: The Governor's website has links to press releases and legal filings here.

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State Supremes Rule Against Gov. Sanford:

The South Carolina Supreme Court ruled unanimously that Governor Marc Sanford must request stimulus money for education as directed by the state legislature. Gov. Sanford says he will not appeal.

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