There's a reason that steel rims are mostly extinct. Not only are they heavy and prone to rust, but it makes for a terrible braking surface, especially when wet. Sanding is going to make the steel rust faster, and the paint will be quickly eaten away by the brake pads.

Either look on craigslist in your area for a wheel/wheelset/new bike, or find a LBS that deals in used parts or a bike co-op. You'll be able to find a much safer wheel for not much money (or maybe even free).