Bet on blackState faces tough economic future, beginning on Black FridayBy Bill Davis, senior editor NOV. 27, 2009 -- This year’s Black Friday, the big shopping day after Thanksgiving, may serve as a weather vane telling which way the state’s economy is headed.
 John Rainey, the chairman of the state Board of Economic Advisors, said this week that if Black Friday sees a return of shoppers to stores nationwide, it will bode well for the state; and if it doesn‘t, the opposite.
A big part of Rainey’s job is to set revenue expectations for budget-makers in the Statehouse. Already this year, his board has passed down close to $400 million in cuts to the state’s General Fund budget because of slower than expected tax revenue collections.
And he doesn’t see that trend reversing. “I think it’s important to tell people (in South Carolina) exactly what is going on and not sugar-coat it,” said Rainey.
South Carolina state government isn’t alone in its budget problems. Nationally, state General Fund expenditures were down 4.8 percent at the end of the 2008-09 fiscal year which ended June 30 of this year, compared to spending the year before, according to a recently-released report from the National Governors Association.
That report also stated that General Fund revenues were down 7.5 percent nationally, and were historic in that they were the second year of continued drops - a first since the Great Depression.
But potentially more important to lawmakers, the report went on to say that the two years following the bottoming-out of the national economy - which it put it as late as September 2009 - were usually even harder on state budgets.
The difference between the expenditure and revenue numbers likely represented states resorting to bleeding rainy-day funds to offset the additional losses in revenue. By contrast, several Southern states raised taxes to cover shortfalls; South Carolina has yet to do so.
State economists two years ago were optimistic, projecting the recession would hit here in South Carolina later than in other states and not last as long. It seems, the opposite has proven true.
Two years ago, the state set record General Fund revenue projections, at $7.2 billion. The current state portion of the budget is set at $5.7 billion and falling.
“No one could have predicted the mortgage and banking meltdowns,” said Rainey, who fears the state will hit 13-percent unemployment by the end of December.
Rainey said a more detailed review of the state’s economic health, called the “U6 employment rate,” painted a grimmer picture. The U6 combines the unemployed along with the underemployed, and, Rainey said, weighs in at between 23 percent to 24 percent in South Carolina.
“I don’t when we’re going to see 10-percent unemployment, much less full employment,” said Rainey, of the percentage widely accepted to be close to 5 percent. “To make up one and a half percent, it takes 30,000 new jobs.”
Rainey praised the Boeing expansion announcement in North Charleston, saying it was good for morale, “but it will do nothing to put food on the table in Lancaster County, and that’s why whoever the next governor needs to come in with a county-by-county jobs plan.”
Crystal ball: How bad is it going to get in the coming year? “All I know is that it’s not going up,” said Rainey. Time, and perhaps Black Friday, will tell.
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Another pre-file date, moreNext week will be a busy and important week in the Statehouse. Responding to requests from several House members, an additional date to pre-file bills has been added: Dec. 1, with a noon deadline. There will be another pre-file date two weeks later, Dec. 15. Also on the agenda:
- On Tuesday, the House Judiciary Impeachment subcommittee will meet in 101 Blatt at 10:30 a.m. to discuss the S.C. Ethics Commission report on Gov. Mark Sanford’s alleged transgressions. It will meet on Thursday at the same time and in the same room.
- Also on Tuesday in the House, the Ways and Means Employment Security Commission Ad Hoc Subcommittee, which is looking into overhauling the ESC, will meet at 11 a.m. in 511 Blatt to receive a report from the Department of Commerce.
- On Wednesday, the S.C. Taxation Realignment Commission will meet at 10 a.m. in 105 Gressette to further discuss proposed changes to the state’s tax structure.
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Fence straddlin’S.C. Attorney General Henry McMaster’s decision to wait on weighing in on ethics charges against Gov. Mark Sanford are a neat summation of Statehouse politics, as they stand today. McMaster has before him a decision that could make or break his career: stand firm; go after the governor and root out the truth of who knew he was in Argentina; or not take it up at all, ensuring he has a better chance of replacing him in the governor’s mansion. Either move could motivate or alienate his voter base. And McMaster has chosen, instead, to wait and see. Judging from last year’s legislative session, inaction could be contagious and the leadership vacuum may be spreading.
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Weakened Sanford pushes ahead despite cloudBy Andy Brack, editor and publisher NOV. 27, 2009 – On the day newspaper headlines screamed that the state Ethics Commission accused Gov. Mark Sanford of 37 violations, the governor's sense of humor remained intact. When asked how he would like his terms as governor to be remembered, he said, “Better than today.”  Then during another of his Rotary Club apology tours across the state, Sanford paused 9 seconds to consider the question. He highlighted two areas he hoped to be remembered for:
Investment. He pointed to $8 billion in job-creating business investment over the last two years. He briefly highlighted some initiatives, such as tort reform and tax policy, that improved the “soil conditions” for small businesses to thrive better.
Land conservation. Sanford said more land had been protected under his administration than any other. In turn, that improved the state's attractiveness and quality of life. Since funding for the S.C. Conservation Bank started in 2004, more than 152,000 acres have been set aside at a cost of $80.6 million.
During the talk (and after the self-imposed obligatory apology for letting people down with his extramarital affair), Sanford asked Rotarians to urge state lawmakers to make a few specific policy changes – what he called “rifle shots” – to help set the course on a new direction. Among the suggestions: restructuring the state Budget and Control Board into an executive Department of Administration overseen by a governor; allowing the governor and lieutenant governor to run on the same ticket; changing some constitutionally-elected officers into appointed positions; setting spending limits; improving economic development; and reforming the state Employment Security Commission. None of his proposals were new. As he discussed them, what was remarkable was how the sometimes rambling, professorial rhetoric had not changed, but how the wind was gone from his sails. He was a fellow talking the talk, but who seemed really tired of walking the walk. Sanford said he had become a big fan of these policy rifle shots because he “thought there was more power in the executive branch than there was. And we took some bigger bites than were achievable. “Little bites are indicative of the ways that more policy has to change. … We have a political system designed to guard against revolutionary change.” * * * And so it would be revolutionary if South Carolina's legislators actually turned Sanford out as governor. While a House subcommittee started work on an impeachment bill this week, caution is in order.  At this point, Sanford is accused not of any felony, but of ethics violations, each of which carry about a $2,000 civil fine. Although some GOP lawmakers remain mad, embarrassed and highly irritated with how the governor behaved over the summer, the real question is whether these ethical allegations are aggravated enough to throw out a weakened weak governor out of office.
Yes, he's made some mistakes. But flying business class instead of coach doesn't reach the level of impropriety envisioned by the framers of our state constitution. It's better for a governor to get off a 14-hour plane trip a little refreshed than to go into immediate meetings with bad jet lag from being cramped in a coach seat. His campaign spending might have some minor problems, but that's not unexpected with millions of dollars and hundreds of events over several years. Most of the legislators “sitting in judgment” of Sanford probably wouldn't meet the standards they're setting for Sanford in their own campaign spending. And sure, he might have used some state travel in questionable ways. But remember, governors and their families live in a bubble imposed by the job. They have big pressures on them to try to maintain normalcy. Bottom line: Sanford has been weakened by his affair. His legislative initiatives are pretty much dead on arrival in the General Assembly. But he hasn't reached the threshold of serious wrong to be turned out of office according to the law in the state constitution. Instead of obsessing on Sanford in 2010, lawmakers should spend their time on real problems – getting better jobs for people, improving education and bettering health care.
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S.C. Policy Council The public spiritedness of our underwriters allows us to bring SC Statehouse Report to you at no cost. This issue's underwriter is the South Carolina Policy Council. Since 1986, the Policy Council has brought together civic, community and business leaders from all over our state to discuss innovative policy ideas that advance the principles of limited government and free enterprise. No other think tank in South Carolina can match the Policy Council's success in assembling the top national and state experts on taxes, education, environmental policy, health care and numerous other issues. That ability to bring new ideas to the forefront, lead the policy debate and create a broad base of support for sensible reform is what makes our organization the leader in turning good ideas into good state policy. For more information, go to: www.scpolicycouncil.com.
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Courage column draws letters11/24: Courage column was great to see
To Statehouse Report:
Love the language of, "flashes of courage." [Commentary, 11/20]
We need a lightning storm of flashes of courage. Happy to see you on "the Dew" and so glad you included Joe Riley among the list of great leaders. I agree and wish he could be cloned to run every city in America.
-- Terri Evans, Atlanta, Ga.
11/23: Brack column is idiotic
To Statehouse Report:
I normally don’t like to totally waste my time, but I have to admit that on just about every Sunday, I do just that for the three or four minutes it takes me to read your drivel. I also don’t normally resort to name calling in this type of correspondence, but you left the gate wide open in your Sunday article.
It seems difficult to find a good word to describe you in a precise way, so I took the liberty of creating one: I think what fits you really well is GLIB-IDIOT. You (sic) attacks on anybody and anything conservative are laughable. Let’s see: there was blowhard, weakling, scoundrels, partisan boobs, and political lemmings.
I normally read your junk and throw it in the trash where it belongs. This time, however, I thought that I would waste a minimal amount of time to respond, recognizing that your writings don’t warrant even the time it took to write these comments.
But, back to the name calling. I didn’t find the need to create a word to describe liberals in general – a perfect one is already in existence: STUPID. (I think underlining and capital letters are so appropriate in this case.)
I started to ask how it felt to be so wrong on so many things, but then realized the futility of that question. (see above.) Well, it’s obvious that the subject of stupidity (excuse me – liberalism) can’t be covered in an e-mail. Please wait for the book.
-- Harry L. Cribb, Florence, S.C.
11/23: More courage needed
To Statehouse Report:
An excellent piece that I'd like to see get picked up by more media outlets. My husband and I bemoan the lack of leaders who are thoughtful and deliberate. Courageous is certainly the third leg of that stool. Our president is showing us that he will not be forced into rash decisions on the basis of politics alone. And, as you mention, Lindsey Graham is doing that as well. Sarah Palin is so dangerous because she is the polar opposite: unthoughtful, impulsive and fascinating in a train wreck kind of way.
I hope you will keep the focus on politicians (of any party) with the best qualities and bring the local ones to our attention. It is a vital service you can perform.
-- Diane De Angelis, Charleston, S.C.
11/23: Great job
To Statehouse Report:
So how do you really feel? :)
Seriously ... great job. That message needs to said a lot more in South Carolina than we're hearing it.
-- Paul Wilczynski, North Charleston, S.C.
Want to send us a letter? Letters to the editor are published weekly. We reserve the right to edit for length and clarity. We generally publish all comments about South Carolina politics or policy issues, unless they are libelous or unnecessarily inflammatory. One submission is allowed per month. Submission of a comment grants permission to us to reprint. Comments are limited to 250 words or less.
Please send to: feedback@statehousereport.com.
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Up, down and in the middle Tenenbaum. Kudos to Inez Tenenbaum of South Carolina, the head of the federal Consumer Products Safety Commission who is pushing to remove defective products more quickly from national shelves. More.
 Sanford. It's not good news that the governor faces 37 counts of civil ethics violations, but he's hanging in there and preparing to fight it.
 House. There are some who are itching for a fight with Sanford, but others who are trying to be cooler heads to figure out whether what the governor did really merits impeachment.
 Scores. The number of students who passed the state's high school exit exam on the first try dropped from 80.8 percent to 76.1 percent this year. More. Hate crimes. Reports of hate crimes went up from 127 in 2007 to 153 in 2008. More. Tax-free guns. This still is one of the dumbest things we've heard of in a long while. Unemployment: 12.1 percent. Enough said.
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