NOTE: This is the first of a two-part series looking into what is being done to get South Carolinians back to work.

DEC. 4, 2009 -- South Carolina may have left the recession behind according to news reports, but its job-hungry residents are going to be feeling the pinch for some time to come, perhaps all the way to 2011.

Sure, successive fiscal quarters of a shrinking economy may have come to a halt in September, but some South Carolina experts have been muttering that, at best, the next year and a half will bring a “jobless” recovery during which the state’s per capita earnings increase slightly, but lots of new jobs are not created.

At worst, they fear the overall economy will improve, but the number of jobs lost will continue to mount, though not at the same rate. Just take a look at the so-called U6 unemployment rate, which includes people getting unemployment benefits, those whose benefits have maxed out, people who are “under-employed” (think part-time jobs) and those who have just given up,

In 2007, the state’s annualized U6 rate was 9.5 percent. By June 2009, it was 12.1 percent. Now the scary part: In October, the rate jumped to 18.4 percent,according to data provided by the state unemployment office.

S.C. Board of Economic Advisors chairman John Rainey, who last week told Statehouse Report that the U6 rate hovered around 25 percent now, last week called for the next governor, whether by election or impeachment and removal, to come to the table with a comprehensive jobs plan. That plan, he said, had to include specifics and take into account the various divides that erupt across South Carolina.

Too many South Carolinas?

“That’s the problem; there are so many South Carolinas in South Carolina,” agreed Don Schunk, a noted economist and professor at Coastal Carolina, a day after spreading a little holiday job gloom at the USC Moore School of Business annual Economic Outlook Conference. “I just don’t think we’re going to see much job growth for the next two years.”

Schunk, echoing many others, said that whatever plan would work in rural areas, may not work in urban areas, and vice versa.

“Politicians over the next year will talk about growing a ‘technology and knowledge-based’ economic development,” said Schunk. “That might be good in big cities like Columbia, Greenville or Charleston, but what about rural areas like Marion County?”

S.C. Association of Counties Assistant Director Kathleen Williams agreed. “We can’t bring Boeing to Marion County,” she said while attending a job creation conference in Charleston.”

State more connected

Economic development professionals are mindful, though that the state’s counties are more connected than one might think as the demand for work and widgets can ripple across the state’s moribund job waters.

For the past two years, the 10 counties of the Upstate Alliance have gone through a regional strategic planning effort to see how best to develop the economy in the upper-left corner of the state, according to executive director Hal Johnson. The results? Apparently, we’re all in this together.

Johnson said politicians need to have a plan that works statewide, as well as on local and regional levels. Otherwise, someone will get left behind.

“All deals are local,” said Johnson, copping a phrase from the late U.S. House Speaker Tip O’Neill. Johnson argued a properly-constructed, local-friendly, statewide economic plan could save the state valuable time and economic woe.

That connectivity between local, regional and statewide concerns has not always been present in the governor’s office, according to Johnson, who has seen Gov. Mark Sanford and the legislature at loggerheads over economic development efforts.

“There’s been a disconnect,” said Johnson, understating the fight.

(By contrast, Williams argued that Sanford’s “local knows best” mantra from his first term showed that some governors “get it.”)

Johnson offered a variety of efforts that could go toward solving the state’s job and economic woes over the next 10 years. Education topped his list. He said he wished schools and the business world would work in concert to better prepare students for jobs shrinking in number due to overseas competition and production improvements at home.

But those future jobs have to be housed somewhere. Johnson said that banks haven’t been cutting loans for non-owner-occupied buildings, and demanding upward of 60 percent down from the applicant before signing a check. That, he said, could seriously cripple the state’s economic and job growth in the near and distant future.

“We’re going to have to look at taxation, but call it an investment in ourselves,” said Johnson, who argued that the state legislature may have to get further involved.

Schunk suggested leadership was critical. “I don’t know exactly what we need to do to get the state back on track, quicker,” he said. “I guess if I did, I’d be running for governor.”

Next week: What are the job and economic development plans of the candidates running for governor, and do they measure up to what the state needs?

RECENTLY IN NEWS

State may face tough economic future
11/20:  Legislature may face slowdown in 2010
11/13:  Traditional issues get new spin for 2010
11/6:  Straightening out SC's tax puzzle

• Judiciary. The House Judiciary Impeachment Subcommittee will meet at 10:30 a.m. Monday in 101 Blatt to discuss the remaining ethics charges against Gov. Mark Sanford.
  
  
• TRAC. The S.C. Taxation Realignment Commission will bring together members of both the state House and Senate at 10 a.m. Wednesday in 105 Gressette.
  
  
• Sentencing. A Sentencing Reform Commission work group will meet at 1 p.m. Wednesday in 209 Gressette to discuss sentencing guidelines for crimes requiring more than a year of incarceration.

Sparks may begin to fly on Monday during a meeting of the House Judiciary Impeachment Subcommittee looking into a host of allegations of misdeeds by Gov. Mark Sanford. The subcommittee will on that day discuss for the first time the ill-fated economic junket Sanford took to South America earlier this year, the same one he scooted out on for a tryst with his Latin lover. If anything will sink Sanford, it’s likely this.

The House Judiciary Impeachment Subcommittee continued its hearings into alleged improprieties by Gov. Mark Sanford, regarding his use of campaign funds, the state plane and “abandoning” the state for five days for an amorous and extramarital trip to South America.

This week, the panel dismissed 28 of what it deemed to be lesser charges, such as upgrading business flight tickets, to focus on the remaining nine charges.

Sanford may still face substantial fines arising from the dismissed alleged ethics violations. The governor did not attend the hearing, but sent his lawyers. Word from inside the Statehouse this week was that even if the panel does not move to recommend impeachment in the House, the hearings may drag on in a punitive effort to drain Sanford’s remaining re-election campaign accounts.

Independent running

Columbia businessman Morgan Bruce Reeves has announced his intentions of buying an RV, touring the state, and campaigning as an independent party candidate for governor.

DEC. 4, 2009 – With a quarter of the state’s population jobless, underemployed or fed up looking for work, a pretty good case can be made that if the state of South Carolina wants to move past the recession, it needs to seriously rethink its priorities.

Instead of continuing to do things the same ways they’ve always been done, now might be the best time to shake things up a little. Perhaps it is time to focus more on underfunded areas that, if funded better, could generate real rewards.

Those in power, state lawmakers included, have a special responsibility to look out for those without much. As we’re reminded in Verse 48 of Chapter 12 of the Book of Luke, “Everyone who has been given much, much will be demanded; and from the one who has been entrusted with much, much more will be asked.”

Is that a Biblical call for wealthy people to relax a little about tax cuts and not get bent out of shape about pragmatic tax hikes? You be the judge. Certainly people can “render unto Caesar” what is Caesar’s, but isn’t there a duty among the state and the wealthy to do more for the “least of these brothers of mine,” as Jesus described in a story about the sheep and goats in the Book of Matthew, Chapter 25?

Increase the cigarette tax. By raising our 7-cent, lowest-in-the-nation tax to $1 per pack, South Carolina could generate $150 million in new revenue that could be matched with $450 million in new federal money to improve health care.

Eliminate the corporate income tax. Most businesses try to avoid this and say it makes the state less competitive in attracting business. So let’s get rid of it. The loss: $130 million. 

Add a new tax bracket. To increase progressivity of the state income tax, lawmakers should consider a new top bracket for people with high incomes. Such a move would impact the relatively few people who make more than $250,000 a year and raise up to $150 million that could offset the loss from eliminating corporate income taxes. 

Cut sales tax exemptions. The state currently has more than 70 special-interest sales tax exemptions that keep it from collecting $2.5 billion in sales tax. Many of the exemptions were approved decades ago when the state lured manufacturers here. Today in a knowledge economy, tax breaks on newspaper sales ($6 million a year) or coal and fuel sales to electricity manufacturers ($103 million) might not be the fairest system. If the state could remove just half of outdated exemptions which may not fit the modern economy, it could reap $1.2 billion in revenues.

Cut the sales tax rate: Instead of taking the $1.2 billion in new money and spending it, the state could cut two cents from the six cent sales tax rate and, in turn, lower taxes on everyone, increase progressivity and make the state more competitive. (A penny in sales tax reaps about $600 million a year.)

Economists routinely say that it is better for a state to have a broader base for taxes, which suggest removing exemptions, than it is for a narrower base. A broader base helps create a lower tax rate – which would be helpful for all South Carolinians now at the expense of a few who have more.

State lawmakers need to be bold leaders in the coming session to grapple with generational problems. They should keep a few appropriate Bible verses in their minds as they’re moving around the shekels – and not just remember verses when they’re pushing a social agenda.

By Sen. Vincent Sheheen
Special to Statehouse Report

Stores open earlier with the expectation of holiday shoppers.  Children hang their stockings on Christmas Eve with the expectation that they will be filled by the morning.  Millions make resolutions with the expectation that the New Year can bring with it a new beginning.  And most importantly, many of us anticipate a time of peace, joy and celebration on Christmas day.  

 While our holidays are marked by high expectations, our outlook on South Carolina’s leadership is too often the opposite.  Over the last decade, South Carolina has become saddled with low expectations. 

Dismal statistics like our state’s high unemployment rate have become “accepted” by too many who think this is the way it always has been and always will be. These dangerously low expectations too often become self-fulfilling prophecies, as our state government struggles to fulfill its most basic roles and enact common-sense reforms to improve our common welfare and economic prosperity.

Here are just three examples of common-sense initiatives that South Carolina - - with the right expectations - - can accomplish in the months ahead.

Health care for working South Carolinians and small businesses.  It’s time to raise our lowest-in-the-nation cigarette tax to at least half the national average.  We’ve missed out on billions in federal matching dollars that could have been used to provide health care coverage for workers because of special interest lobbyists and a governor’s veto.  Instead of reducing youth smoking, we have allowed our state to become a place where criminal purchase cigarettes to sell on the black market in other states.  This year we must increase the cigarette tax and help small businesses provide health insurance to their workers. 

Employment Security Commission reform.    A lack of aggressive action and long term strategic planning by state leaders has left us with one of the highest unemployment rates in the nation.  This high unemployment rate has exposed serious problems with our employment security commission's ability to properly track, process, and screen persons eligible for unemployment benefits.  This year, our state government must reform this process and agency to ensure that those who truly deserve benefits receive them promptly and that those who do not deserve them are precluded from taking advantage of the system. 

Higher education funding.  Cuts to higher education have resulted in college tuition skyrocketing - - nearly tripling at some institutions over the last decade.  Our entire economy stands to suffer if we continue to price our young people out of college.   Even in this tough budget year, we must re-emphasize higher education and re-prioritize higher education funding.  Higher education has a direct and clear impact on economic and income growth in states that prioritize it.

Thomas Edison said “If we did the things we are capable of, we would astound ourselves.”  Let’s resolve, as we enter 2010, to astound ourselves by expecting more from ourselves and our state’s leadership.  

S.C. Sen. Vincent Sheheen (D-Kershaw) is a candidate for governor.

To Statehouse Report:

Interesting piece about Sanford but what about the fact that he left the state -- and the country -- without letting anyone know where he was or how to reach him?  Isn't that the biggest offense? 

You asked if Sanford's out-of-country, out-of-touch trip was precluded by the state constitution. 
 
Well, I guess that's what the legislators will have to determine, based on the following:

Article XV: The House of Representatives alone shall have the power of impeachment in cases of serious crimes or serious misconduct in office by officials elected on a statewide basis, state judges, and such other state officers as may be designated by law.  The affirmative vote of two-thirds of all members elected shall be required for an impeachment.  Any officer impeached shall thereby be suspended from office until judgment in the case shall have been pronounced, and the office shall be filled during the trial in such manner as may be provided by law.  

Was his willful neglect of the state serious misconduct?  I think so.  If any other employee in this state left his or her job for 5 days without notifying anyone in authority of his/her whereabouts, it would probably be deemed serious misconduct and likely result in job loss, don't you think?
 
Serious misconduct is the language used in the impeachment resolution.  Any legislator who votes against the resolution would have to determine that Sanford's actions did not rise to the level of serious misconduct. 
 
Ask Jenny what she thinks.  :)

-- Sherry Shealy Martschink, Summerville, S.C.

 Legislature concentrating on other stuff

To Statehouse Report:

The piece on Sanford in Statehouse Report dwells on the ethics charges, and makes the case that they don't rise to the level of impeachable offenses.  But you have access to the proposed impeachment legislation (and never mentioned it).  The legislature is concentrating on an entirely different set of circumstances: the abandonment of the state without notice and arrangement for interim governance.  That is surely an entirely different level of offense, which put the state at theoretical risk.

One thing we need from all sides in the Sanford debate (starting with him) is honesty.  Your argument was disingenuous.  It set up a travel straw man and vigorously knocked it down.  Poor show.

-- Susan Breslin, Folly Beach, S.C.

 

Brack reply: The S.C. Constitution does not prohibit a governor leaving the state without notice; hence the abandonment allegation is entirely specious.

 

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First Lady Jenny. Barbara Walters named you one of top-10 fascinating people of 2009; that might be good. More.

Drought really over. Wednesday’s deluge brought rainfall records across region (more). It also drowned a beloved ‘00 Toyota Sienna owned by an interested party at Statehouse Report.

S.C. economy. The recession may be over, but the suffering is not.  More.

S.C. politics. Even NPR is skewering our state’s recent rash of political fumbles. More.