S.C. Justices Hear Stimulus-Funding Dispute

COLUMBIA, S.C. (CN) - The South Carolina Supreme Court today waded into the debate over who has the authority to request over $700 million in disputed federal stimulus funding and who will determine, if the money is requested, how it will ultimately be spent.

Gov. Mark Sanford refused to ask for 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 a 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 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 Court began shortly after 10 a.m., with the court 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. Plaintiffs were given 20 minutes to present their case, followed by 20 minutes from the respondents. The petitioners were then given 10 minutes to rebut.

The attorneys 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 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, attorney Adam Charnes, a partner with Kilpatrick Stockton and a former law clerk for U.S. Supreme Court Justice Anthony M. Kennedy, 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," he said. "That has to mean something."

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 wrote 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 the governor - must request the federal money, he said.

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 Chief 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 the hearing's moments of levity.

"I got off course here; may I start my spiel now?" Cook asked.

"Absolutely," Toal replied. "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 sta

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