Governor Sandford Rejects Stimulus Funds

South Carolina's Governor Mark Sanford (R) has rejected the stimulus funds:

The move will cement Sanford's growing reputation as a political powerhouse among Republican party stalwarts nationwide — though how much of the estimated $8 billion in stimulus funds destined for South Carolina will be affected is unclear. The law allows state legislative leaders to accept funds the governor rejects.

"Our objections to the so-called stimulus bill have been well-chronicled for the way it spends money that we don't have and for the way this printing of money could ultimately devalue the American dollar," Sanford said on Tuesday, even as he acknowledged that he'll accept some.

"Those of us opposed to this package lost the debate on these merits, and I now think it is important we look for creative ways to apply and use these monies in accordance with the long-term interests of our state," he said.

In the end, the question of whether governors accept the funds will generate something of a governmental/constitutional battle regarding federalism and the soveriegnty of the states.

The decision also sets up a potential battle between Sanford and the South Carolina legislature. If the Legislature accepts the money, will Sanford veto any budget or spending package in the state that is dependent upon the money. Such a move will clearly be the principled move. Given that the legislature could, I assume, override the veto, such a vote would clearly put the legislature in the position of owning the acceptance of the stimulus funds and it will remain to be seen how that will be perceived by the voters in South Carolina.