JAN. 3, 2014 -- South Carolina’s population continued to grow over the last year, gaining more people than the combined populations of Anderson (26,871), Beaufort (12,534) and Fort Mill (11,027).
According to new figures from the U.S. Census, South Carolina’s population grew by 51,422 people, a 1.1 percent increase to 4,774,839. It won’t take but a couple of years for the state, the 11th-fastest growing in the country, to reach 4.8 million. More.
HOW WE GOT OUR ESTIMATE
After consulting with state finance and revenue officials, we used two methods to arrive at the $65 million estimate of new tax dollars.
1. Budget. We took last year’s state budget ($6 billion) and divided by 4.7 million people to determine that the per capita amount of dollars from each person in the state was $1,276.00. By multiplying that amount by the new residents, estimated new tax money is $65.6 million.
2. Burden. We took the state-local tax burden from the Tax Foundation (2010) of $1,909 for South Carolina. Then we assumed (after talking with experts) that two thirds of that went to the state, which would be $1,279.03, and multiplied that amount by new residents. The result: An estimated $65.8 million in new tax money.
|
For students of public policy, the almost 1,000 people who moved every week into the Palmetto State means that the state will have a lot more in tax revenues to steer to provide services and fix nagging problems.
According to Statehouse Report estimates, state tax coffers will increase an estimated $65 million annually thanks to the families and retirees moving into South Carolina. That's in addition to almost $440 million in new revenues from unexpectedly high collections, particularly from corporate taxes, as we reported Dec. 20.
Officials say much of that money is gravy because many of the fixed costs of government remain the same. If the new residents include 10,000 school-aged children, for example, the state would have to hire about 400 more teachers ($12.8 million) and it might have to hire some more law enforcement personnel or administrative processors.
But most agencies, especially those driven by fees paid for services, won’t have to make new hires. For example, if 40,000 new adults needed drivers’ licenses, they won’t show up on the same day and they won’t show up in the same office. More than likely, current staffing could handle the additional load.
So assuming that half of the new money -- $33 million or so -- would help fund existing programs to extend state services to new residents, what could state lawmakers do with the extra millions, other than stick it in the General Fund as slush money?
Berkowitz: Spend it for more child care
One of the biggest problems for low-wage earners is getting quality child care so that working parents know their children are safe, says Sue Berkowitz, director of the S.C. Appleseed Legal Justice Center. If the state could provide more child care subsidies, not only would workers win, because they’d be providing for their families and off the “welfare” system, but small businesses would too, Berkowitz said. That’s because small businesses, which may not be able to pay more in wages, would get more stable employees.
“It also creates jobs because child care providers are local jobs going into the economy,” she said. “It’s also a huge win for kids, because it helps them get prepared for school for when they go into kindergarten.”
Campbell: Take care of infrastructure
South Carolina has a lingering $29 billion problem with infrastructure for roads and bridges. That’s more than a billion dollars in needs every year for the next 20 years to bring the state road network to acceptable levels.
“Our infrastructure is really falling down around us as we speak,” said state Sen. Paul Campbell, R-Goose Creek. “We’ve really got to find a way to fund the state Department of Transportation budget.”
That means taking extra new money, such as the $30 million from new residents, and making big adjustments -- increases -- into South Carolina’s low gas tax.
But it’s going to be a hard sell in the current legislative climate to get passage of an increased gas tax. And it doesn’t help, Campbell says, that Gov. Nikki Haley is against it -- although the S.C. Trucking Association believes a tax hike is a good idea for the long term.
So, Campbell said, state legislators are looking for creative ways to fund more money to roads, such as a measure that would allow each county to add a penny in sales tax to deal with local transportation needs.
Hutto: Fund education for the future
For state Sen. Brad Hutto, D-Orangeburg, it’s not a tough decision on what to do with unexpected new tax revenues -- put it into early childhood education.
“To me, if you’re talking about the highest and best use, I think of universal 4K kindergarten,” he said. “It all flows up. If you have an educated workforce, you’ve got fewer people in prison, more people in jobs.”
If the state doesn’t invest more in the education of South Carolina’s children, it won’t be able to compete to attract businesses like Google and Boeing, he said.
In particular, the state should focus on improving education to increase opportunities in rural areas, Hutto said.
“You’re losing population in the rural areas,” he said. “The best and brightest are leaving. They’re not coming back to Orangeburg and Allendale. Unless we can get them to have a realistic prospect of having a good quality job, it’s just a vicious cycle.”
He advocated a statewide educational millage formula to steer some of the wealth of areas like Greenville and Charleston to rural areas that don’t have the tax bases to be able to pay for top-notch teachers that they need.
RECENT NEWS STORIES