- Associated Press - Wednesday, January 12, 2011

COLUMBIA, S.C. | South Carolina must cut taxes and trim the size of government to turn around its lagging economy, Gov. Nikki Haley said Wednesday in an inaugural address given moments after the 38-year-old Republican made history by becoming the state’s 90th chief executive.

The first woman and first member of a minority to run the state invoked South Carolina’s fierce spirit of independence during the Revolutionary War in suggesting the state will continue to fight federal mandates. She blamed misguided federal aid for helping ruin the state budget.

“Nearly two years ago, the federal government in Washington decided to transfer its irresponsible fiscal practices to the states. And our state, just like every other, accepted it,” Mrs. Haley said. “When we produce this year’s budget, we will see the heavy price for having done so.”

The speech wasn’t heavy on details, but repeated several themes from Mrs. Haley’s rise from state representative to governor, winning a tough four-way Republican primary with substantial help from tea party activists and former Alaska Gov. Sarah Palin.

Mrs. Haley, who was close politically to unpopular outgoing GOP Gov. Mark Sanford, said state spending must become more efficient and education must be improved. Many consider the Indian-American a rising star in the party.

She also hinted at allowing children to attend school outside their home districts and renewed her call for lawmakers to record all of their votes on legislation.

“In the days, weeks and months ahead, we have the opportunity to reduce state spending and make it more efficient. We have the opportunity to improve education and allow our children to be successful regardless of where they’re born,” Mrs. Haley said.

Dressed in a bright, white overcoat and with husband Michael and their two children nearby, Mrs. Haley, 38, took the oath of office from Chief Justice Jean Toal under sunny skies and near-freezing temperatures. Michael Haley, an Army National Guard officer wore his military dress uniform.

Mrs. Haley became the nation’s second Indian-American governor as judges, lawmakers and other dignities, including Indian Ambassador to the U.S. Meera Shankar and Mississippi Gov. Haley Barbour, bundled in overcoats to ward off the chill.

She takes office as the GOP controls the House, Senate and all nine constitutional offices for the first time. Those other statewide officers took their oaths shortly before Mrs. Haley was sworn in.

Mrs. Haley was a favorite of Mr. Sanford, who frequently clashed with the legislature. Senate President Pro Tem Glenn McConnell hinted that things may be different now that Mr. Sanford, who was term-limited after eight years in office, is gone.

“In achieving the best for our state, compromise is not always a dirty word,” Mr. McConnell said during his speech prior to the inauguration. “Taking a small step forward is much better than simply standing still.”

After taking the oath, Mrs. Haley reached back into history by recalling how during the Revolution, tea was dumped into Charleston Harbor just as it was dumped in protest in Boston. She recalled how South Carolina declared its own independence four months before Thomas Jefferson wrote the Declaration of Independence, and how the local militia beat professional British soldiers just over the border in North Carolina to turn the tide of the Revolutionary War.

“Let’s see: Tax protests, tea parties, the grass roots beating the professionals - it does have a certain familiar ring to it,” Mrs. Haley said with laughter rising from the crowd.