COLUMBIA Gov. Nikki Haley asked legislators in her third State of the State address Wednesday to overhaul how public schools are funded, improve crumbling roads, and make prisons a safer place for those who guard the most violent offenders.

The Republican governor also revived past calls to restructure government and further cut taxes.

She announced the creation of a task force of business leaders to review regulations and make recommendations for elimination.

And she pledged to “start a conversation” on education funding reform, noting she’s thankful her children attend Lexington County public schools with first-class facilities and teachers, but knows from her own childhood in tiny Bamberg that rural areas often lack the resources. She gave little direction on what to do other than better fund poor school districts without shifting local property tax money from elsewhere.

“The parents of those students pay the taxes that fund their education, and I will play no part in diminishing the return they receive,” she said in her 50-minute speech. “We need to spend our dollars smarter.”

She pledged to work with Republican and Democratic leaders on the issue. While it would hardly be a start to the conversation, Senate Minority Leader Nikki Setzler said he welcomes the governor’s involvement.

Legislators have said for years, without making headway, that education funding reform is a priority. That talk has persisted even as they await a decision from the state Supreme Court on a lawsuit challenging the decades-old piecemeal system.

“It’s been a long time in coming,” said Setzler, D-West Columbia, among the leaders Haley specifically invited to the table. He added, “I think that conversation on funding has to start with a change in tone of being negative on public schools to being supportive.”

House Minority Leader Todd Rutherford, D-Columbia, criticized Haley’s speech as lacking in details.

“South Carolinians expect more than the beginning of a conversation,” he said.

Haley made two refusals on Medicaid and gas taxes.

She said she will never implement an expansion of Medicaid as called for in the federal health care law, saying the state can’t afford the long-term costs of expanding an already inefficient system. The U.S. Supreme Court’s decision upholding the law made the expansion a choice for states, rather than a mandate.

“With such high costs and such poor outcomes, why would we throw more money at the system without first demanding improved efficiency, quality, and accessibility?” Haley said.

She pledged to work to improve residents’ health, especially in rural areas, without expanding Medicaid. For example, she said, next year the state’s Medicaid agency will begin fully reimbursing rural hospitals for uncompensated care.

Rutherford argued South Carolina can implement such things and still expand Medicare to provide coverage to the state’s neediest residents. The federal government promises to fully fund the increase for the first three years.

Haley also said she’d never support raising the gas tax to pay for road and bridge work.

“The citizens of South Carolina deserve to drive on roads that aren’t littered with potholes and on bridges they know won’t fall down,” she said.

Investing in the state’s roads is also critical to bringing jobs to the state, but raising the state’s 16-cents-per-gallon motor fuel tax can’t be part of the solution, she said.

The state Department of Transportation estimates needing $1.5 billion yearly over 20 years to bring roads to “good” condition.

Senate Majority Leader Harvey Peeler said he was pleased that Haley highlighted the need.

“It’s bothered me for a long time, and I’m losing my patience,” said Peeler, R-Gaffney, who frequently complains about conditions along Interstate 85.

Haley recognized the warden of maximum-security Lee Correctional, where prisoners twice last year took officers hostage. Haley asked lawmakers to increase money for prisons to upgrade security, including building watch towers at Lee.

House Speaker Bobby Harrell agreed that protecting prison guards is critical, adding it will be part of the budget.

He noted that many of Haley’s requests mimic the House GOP caucus’ priorities, including ethics reform, tax cuts, government restructuring and cybersecurity.

The Columbia real estate agent who gave the Democrats’ response blasted Haley and revenue’s leadership for not doing what was necessary to prevent the hacking. Experts contracted by the state have said encrypting the data or requiring two passwords for those logging into the system remotely would have prevented the theft.

“Their choices have needlessly endangered not only my business and my identity, but also the identity of my children and every other South Carolina tax payer and their family,” said Jill Moylan, owner of Home Advantage Realty, selected to give the response normally given by a Democratic legislator.