Nowhere in the country is the fight over the stimulus bill more heated than in South Carolina. Governor Mark Sanford’s opposition to the federal funds has exponentially complicated the state’s already precarious financial situation. Statehouse reporter Yvonne Wenger has been on the beat since February 2005, and has been covering the twists and turns in the stimulus saga. She recently spoke with CJR about how the recession is hitting the Palmetto state.

Katia Bachko: For people who may not know about South Carolina politics, can you give me a sense of what’s happening right now?

Yvonne Wenger: It’s so complicated. There are three lawsuits pending with regards to the stimulus money, specifically the $700 million in budget aid. Eighty-two percent of that is supposed to go to public schools and colleges and the remainder can go to a variety of investment programs. So on Monday, the governor said that he is going to accept whatever the state Supreme Court decides in two of the lawsuits. In the third case, the governor sued our attorney general and the state over what he called “a power grab” by the legislature to try to rewrite federal law and force him to take this portion of the money. His case remains in the federal court, but the governor said that he would drop it if he loses at the state level; that hearing was scheduled for Wednesday morning. The state Supreme Court justices accepted original jurisdiction on the case, so it’s the biggest thing that’s happening. [ed: The Supreme Court may decide today if the governor must step aside and allow the money to come to the state.]

As a result, some eighty-five school districts in the state have postponed adopting the final versions of their budgets, because so much is up in the air. A major problem for the districts is that because of the bad economic situation, the budget had to be cut. The districts already used up their fund balances and so now there’s really no safety net, and if they don’t get the stimulus cash then they’re going to have mass layoffs.

KB: What’s the tone of the political discourse?

YW: It’s more divisive than ever. Some of the lawmakers have stopped with the niceties, which is an interesting dynamic in South Carolina because people are very cordial and very gentleman-like. This stems back to a long feud between the governor and the legislative leaders; you could notice a different tone after the November elections. And it’s only gotten worse, you know, as the stimulus fight has dragged out.

KB: You mentioned that after the legislative session wraps up in June, you’ll start doing enterprise pieces. What will you cover?

YW: My goals are to look at the legislation that did pass and how it gets implemented by the agencies. Also, I want to look at things that didn’t pass, and why they didn’t pass. There’s a lack of legislation to address our unemployment rate, which is going between the second- and third-highest in the country, and there’s a lot of heat on the lawmakers for not doing enough to address that.

With regard to the stimulus money, I want to research how much money was actually received. South Carolina is supposed to get $2.8 billion for government services, and then it could grow to $8 billion, through tax credits and breaks and grant money. I’d like to look at weatherization. South Carolina has a whole lot of trailers and mobile homes that are poorly insulated and this money would be available for weather stripping and various forms of insulation. I’d like to see how much of that was drawn down and how many people it ended up helping.

I’ll probably continue to look at the $700 million that’s disputed—if that comes to the state, how that will be used to help public schools. The governor has been saying that he would only request the $700 million in budget aid, if the legislature would use an equal portion of state dollars to pay off debt; but the lawmakers were saying, “Well, we can’t do that because the state’s so cash-strapped that we need this money to sustain services.”

And Sanford says, “Well, you know, if you did a better job of budgeting, then we could properly fund state services while paying down more debt.” I’d like to see how much of that is true: how crucial these dollars were or weren’t for the public schools and the law enforcement agencies.

KB: Can you talk to me about the public reaction to all this?

Katia Bachko is on staff at The New Yorker.