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ISSUE 13.38
Sep. 19, 2014

RECENT ISSUES:
9/12 | 9/05 | 8/29 | 8/22

Index

News :
The perfect storm?
Photo :
Swap meet, Colleton County, S.C.
Legislative Agenda :
On tap for next week
Palmetto Politics :
Former governors push civics initiative
Commentary :
Ever wonder why we vote on Tuesdays?
Spotlight :
The South Carolina Education Association
My Turn :
USC collection to highlight Goldwater campaign’s 50th anniversary
Scorecard :
Four up, four down
Megaphone :
Hasta la vista, baby
Encyclopedia :
Operation Lost Trust

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NUMBER OF THE WEEK

9

That’s the number of counties in South Carolina that are in a low-level drought status despite rains that have drenched much of the state. According to the S.C. State Climate Office, these counties are in the “incipient” drought status: Aiken, Allendale, Bamberg, Barnwell, Colleton, Edgefield, Hampton, Lexington and Orangeburg. It’s the first drought declaration in the state since last April. More.

MEGAPHONE

Hasta la vista, baby

“I think that I was not useful to him anymore — he made the engagement thing four months before the elections. So this is not about his son, this is about his career and his ambitions.”

-- Maria Belen Chapur, the Argentine fiancee of Rep. Mark Sanford who learned he was ending his engagement to her through a rambling 2,300-word Facebook post. More.

ENCYCLOPEDIA

Operation Lost Trust

Operation Lost Trust was arguably South Carolina's largest and longest-running political scandal. Including the investigation, trials, and retrials, the Operation Lost Trust saga extended from 1989 to 1999. The key player in the FBI's investigation into legislative corruption was Ron Cobb, a lobbyist and former member of the S.C. House of Representatives. He was arrested in April 1989 for trying to buy a kilo of cocaine in a deal orchestrated by the FBI for the purpose of securing his involvement as the front man in the Lost Trust investigation. He told members of the General Assembly that he represented the Alpha Group that was seeking support for a bill legalizing dog- and horse-track betting in South Carolina. Cobb recruited Representatives Robert A. Kohn and Luther Taylor to help in securing legislative votes by paying members money in exchange for their support and votes. The transactions were captured on surveillance tapes.

The federal investigation resulted in the conviction of seventeen members of the South Carolina General Assembly, seven lobbyists, and three others for bribery, extortion, or drug use. All but five of the twenty-seven convictions were the result of guilty pleas. In 1991 and 1992 five legislators were granted new trials because of legal errors. U.S. District Judge Falcon Hawkins then dismissed the charges against the five for alleged misconduct by the federal prosecution team led by U.S. Attorney Bart Daniel. Judge Hawkins's ruling was overturned in November 1998 by the Fourth U.S. Circuit Court of Appeals, which reinstated the criminal charges. During the period between 1991 and 1998 two of the five legislators died after long illnesses. The three remaining defendants were retried in 1999, and all three were convicted.

-- Excerpted from the entry by Jon B. Pierce. To read more about this or 2,000 other entries about South Carolina, check out The South Carolina Encyclopedia by USC Press. (Information used by permission.)

PALMETTO PRIORITIES

Palmetto Priorities Statehouse Report encourages state leaders to develop and implement Palmetto Priorities involving several issues to make the state better a better place. Click the link to learn more about our suggestions for bipartisan policy objectives.

Here is a summary of our Palmetto Priorities:

CORRECTIONS: Reduce the prison population by 25 percent by 2020.

EDUCATION: Cut the state's dropout rate in half by 2020.

ELECTIONS: Increase voter registration to 75 percent by 2015.

ENVIRONMENT: Adopt a state energy policy that requires energy producers to generate 20 percent of energy from renewable sources by 2020.

ETHICS: Overhaul state ethics laws.

HEALTH CARE: Ensure affordable and accessible health care.

JOBS: Develop a Cabinet-level post to add, retain 10,000 small business jobs per year.

POLITICS: Have a vigorous two- or multi-party political system of governance.

ROADS: Strengthen all bridges and upgrade state roads by 2015.

SAFETY: Cut the state's violent crime rate by one-third by 2016.

TAX REFORM: Remove outdated special interest sales tax exemptions as part of an overall reform of the state's tax structure to be completed by 2014.

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YOUR COMMENTARY SOUGHT

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News

The perfect storm?

Many say 2015 might be the right year for tax reform

By Bill Davis, senior editor

EDITOR’S NOTE: Today’s news analysis is part two of a series on South Carolina’s tax structure. Part one focused on how the state is struggling to find a balance in how it taxes.

SEPT. 19, 2014 -- If there ever is a year for tax policy reform, then 2015 may well be it, according to academics and observers.

Consider that 2015 will be a year when no one in state government will be up for reelection. The governor’s last name will be either Haley or Sheheen or Ervin. All the statewide constitutional offices will be filled. The House elections are over and the Senate will be in the third year of its four-year election cycle.

In the rawest sense, it will be harder for politicians to hide behind politics. In turn, that means the more difficult and nuanced approaches to tax policy can be tackled outside of the usual “cut, cut, cut” and “make the rich bleed” mantras belonging to extremes of the state’s political spectrum.

“When the planets align like they will next year and politicians are not facing instant backlash for difficult decisions, some might be willing to take a more complex approach” to addressing tax policy, said Winthrop political scientist Scott Huffmon. “Real reform is tough to explain to laymen, and it could only happen in a year like this.

“There’s an old saying in an election, ‘If you’re explaining, you’re losing,’” said Huffmon, who runs the state’s most influential polling center.

South Carolina, by many accounts, is facing a tough tax future. As the state adjusts to a more service-based economy, the tax structure will see its taxable base continue to shrink as demands – better roads, better public health programs and better K-12 education – increase, unless something is done.   

Four years ago, the blue ribbon, mostly-GOP Taxation Realignment Commission (TRAC) was formed to address pressing tax policy issues, such as what to do about what billions in lost sales tax revenues due to exemptions. Then, the state lost $2.7 billion annually to the special-interest tax breaks.

So far, little from the commission’s report has been implemented. And after a palsied effort in the House to remove less than $20 million in exemptions failed to pass, guess what? Sales tax exemptions have grown to $3.1 billion.

So what could, should, and most likely will be done toward addressing the state’s tax situation?

Coulda

Phillip Cease, executive director of the conservative S.C. Club for Growth and staffer of former Gov. Mark Sanford, said there was a “partial” chance that some sort of incremental tax policy changes could happen, specifically as it relates to the state’s gas tax.

That tax, referred to as a “user fee” by some, is one of the lowest in the nation. It is seen as a possible and logical funding source for the state’s infrastructure needs. The federal government two years ago reported that South Carolina has more than $27 billion in needed roads, bridges and infrastructure projects. More recently, transportation officials have pegged needs to be in excess of $40 billion between now and 2040.

But in the last couple of years, the General Assembly has bonded out a half-billion to cover those costs, or a little less than 2 percent of the total needed.

When Former Lt. Gov. Glenn McConnell was still in state office and not leading the College of Charleston as its president, he said the gas tax was the only place left where the state could turn to for that kind of big money, as he said the state’s General Fund was tapped out.

But Cease, like other conservative voices, said the only way a gas tax increase would be palatable on the right was if there were an equal cut in state spending or taxation, rendering it “revenue neutral.” He said conservatives would favor a reduction, if not a doing away with, the state personal income tax altogether. Critics contend that seeking revenue neutrality is a way to mask a benefit to disproportionately benefit the wealthy.

In fact, cutting the state’s personal income tax is exactly the opposite of what the state should do, according to Holley Ulbrich, a senior economist at the Strom Thurmond Institute at Clemson. 

Shoulda

“We have got to stop fiddling with the state income tax and leave it alone,” said Ulbrich, referencing many other more prosperous states that have income taxes. She said positions like Cease’s do not take into account the relatively large amount of exemptions the state allows before it begins to tax income, rendering it among the lower effective rates in the country.

  • Services. Ulbrich also champions increasing the number of services that are taxed, as they would more directly affect deeper-pocketed taxpayers.

“By taxing services like pet grooming or lawn care, it actually protects the middle- and lower-income families” as those who can afford those services and resulting taxes are already spending less of their discretionary income on taxes in the first place, she said.

Ulbrich does favor increasing the gas tax, pointing out that many trucker groups have said they were in favor of paying more if the payoff is better roads.

  • Internet sales. Burnet Maybank III, the former state Revenue head who led the TRAC effort, said the first and best thing residents of South Carolina should do was to write letters to their federal congressmen to demand they vote to pass a U.S. Senate bill ensuring state taxation of Internet marketplace sales.

Maybank also said a subtle structural change in how the legislature writes tax codes could deliver major benefits. He said some taxes should have hard-wired into their legislation automatic cost-of-living adjustments so state government funding could rise and fall with the rest of the economy.

  • Be cautiousAs the director of the Appleseed Justice Center, which advocates for the poor, Sue Berkowitz’s middle name could well be “should.” She is cautious about across-the-board taxation cuts or increases as she said they might affect the lower classes more immediately.
  • Property tax fix. At the other end of the economic ladder, Otis Rawl, president of the state Chamber of Commerce, said something should be done to reduce the burden of paying for public K-12 education that was shifted onto businesses and manufacturing as the result of Act 388.

Act 388 stopped localities from taxing owner-occupied real estate for purposes of funding local education in favor of a statewide special 1-cent sales tax. That has meant localities have had to increase taxes on commercial property and second homes to offset cuts in education funding, exacerbated by the legislature’s common habit to cut per-pupil funding.

  • Or do nothing. In some ways, people who agree with Ashley Landess, the executive director of the conservative budget hawk S.C. Policy Council, will want to see nothing happen at all.
Why? Because, as Landess sees it, state government is already broken, and throwing good money after bad makes no sense whatsoever. She pooh-poohs the gas tax as a panacea, pointing out that a few counties -- mainly Charleston, Greenville, Horry and Richland – have taken the lion’s share of the state’s infrastructure spending.

Woulda

So what’s the answer? If you take the suggestions related above it would be a bit of a Frankenstein’s monster: a wide base of taxable sales with a limited number of exemptions to buffer the working poor (like groceries, medicine and power), while cutting businesses some property tax slack to speed expansion and a gas tax increase to fix roads offset but cuts elsewhere.

Landess and Cease are part of the ongoing debate within the state’s body politic as to what size state government should be. They want it to be smaller. Voices like Ulbrich and Berkowitz call out for it to be larger.

In general, the consensus likely will be for incremental, glacial change, which has been Columbia’s approach to most pressing issues, according to many.

A bellwether may be on the horizon when the House selects Harrell’s replacement. The frontrunners appear to be Speaker Pro Tempore Jay Lucas (R-Hartsville) and former Majority Leader Kenny Bingham (R-Lexington), who chairs the Ethics Committee.

Whoever becomes speaker, that person could set the tone of the 2015 legislative session by creating a special committee to look into tax policy, many observers said.

If such a committee is stocked with powerbrokers in the House, the game is on. If there is no subcommittee or its members are backbench milquetoasts, then the state can expect more of the same.

Bill Davis is senior editor of Statehouse Report.  He can be reached at:  billdavis@statehousereport.com.

RECENT NEWS STORIES
Photo

Swap meet, Colleton County, S.C.


If you’re looking for a “swap meet” — a gathering of folks who want to trade stuff that others might like — look no further than rural Colleton County east of Walterboro, S.C., on S. C. Highway 64.  According to this clever advertisement “vehicle,” there’ll be a swap meet here on November 1. Photo by Andy Brack.  MORE:  Center for a Better South.
Legislative Agenda

On tap for next week

Several meetings are on tap next week:

  • Education. The state Education Oversight Committee’s Academic Standards and Assessments subcommittee will meet 10 a.m. Sept. 22 in 433 Blatt. On the agenda: A new AP U.S. history framework. the EIA and Improvement Mechanisms subcommittee will meet at 2 p.m. that day in the same room. On the agenda: Education credit for exceptional needs children, summer reading, next year’s budget.

  • Animal welfare. A select committee on animal welfare of the Senate Agriculture and Natural Resources Committee will meet 7 p.m. Sept. 23 at Greenville Tech in the University Transfer Auditorium, Building 104. More. The committee will also meet Oct. 7 in Florence and Oct. 14 in North Charleston.

  • Sentencing reform. The Sentencing Reform Oversight Committee will meet 10 a.m. Sept. 25 in 105 Gressette. An agenda includes no information about the topics of the meeting.

  • Expungements. The joint Expungement Study Committee will meet 9 a.m. Sept. 26 in 105 Gressette. An agenda includes no further information. The meeting is scheduled to be broadcast through the Statehouse Web site.

Palmetto Politics

Former governors push civics initiative

Three former governors -- Jim Edwards, Dick Riley and Jim Hodges -- want South Carolina students to get a better education in old-time civics. 

On Wednesday, the 227th anniversary of the U.S. Constitution, they and other state leaders announced the South Carolina Civics Education Initiative, part of a national effort by former U.S. Supreme Court Justice Sandra Day O’Connor and others to ensure people know more about the nation’s system of governance.

It is absolutely critical that all South Carolina students have a sound knowledge of civics,” said Riley. “This is not a partisan issue.  It is an American issue.”

According to a press release, research by the Pew Research Center shows only about one-third of Americans can name the three branches of the United States government, much less say what each does. Studies of high school students in Oklahoma and Arizona showed less than a 4 percent passage rate on the Unites States Citizenship Civics test – the test all immigrants applying for U.S. citizenship must pass.  According to United States Citizenship and Immigration Services, which administers the civics test as part of the naturalization process, 92 percent of immigrants who take the test pass it on their first try.  

There’s also another thing that the new focus on civics might do -- inspire more people to read Statehouse Report!

Commentary

Ever wonder why we vote on Tuesdays?

By Andy Brack, editor and publisher

SEPT. 19, 2014 -- One thing stands out in the recent vote in Scotland on whether to stay a part of the United Kingdom -- more than 84 percent of eligible voters turned out to cast their ballot.

In the United States, the world’s first modern and “leading” democracy, the percentage isn’t so good. According to the International Institute for Democracy and Electoral Assistance, the U.S. ranked 91st out of 198 countries in voter turnout with 65.95 percent of voters going to the polls in 2012. 

Compare that to counties like Bolivia, Ethiopia, Australia, Singapore, Malta, Luxembourg and, yes, Cuba. What do they have in common?  First, each has turnout of more than 90 percent in elections since 2010. Second, voters pick candidates on a weekend day, not on Tuesdays, as occurs with federal and state elections in the United States.

“Other democracies are not so incompetent,” notes writer Juliet Lapidos in a 2008 story in Slate.com. She pointed to Sweden and Australia, both of which get 96 percent of people on registration rolls. Australia, which like the U.S. requires voters to fill out registration cards, also gets high participation because voting is compulsory (you get a $20 fine if you don’t vote, unless you have a really good excuse.)

So ever wonder why we vote on Tuesdays?

It’s because we were an agrarian society when Congress picked Tuesday as voting day in the early days of the country and later extended the voting day to all federal elections, according to the nonprofit, WhyTuesday.org.

“We traveled by horse and buggy,” explains the organization, powered by a well-connected, bipartisan group seeking change. “Farmers needed a day to get to the county seat, a day to vote, and a day to get back, without interfering with the three days of worship. So that left Tuesday and Wednesday, but Wednesday was market day. “

Today, however, our society isn’t a horse-and-buggy culture, as aptly displayed a few years back in a publicity stunt by former Gov. Mark Sanford when he led a horse and buggy around the Statehouse to draw attention to some of the state’s antiquated laws. (A year earlier, you might remember that he took two piglets to the Statehouse lobby to complain about pork-barrel spending, but the pigs’ bowels didn’t exactly cooperate with the photo op.)

So with all of the fiddling that seems to go on with political factions claiming  they want to boost voter participation, why not look at just moving the date for the whole country from Tuesday to, say, a Saturday?

I would support voting on a Saturday,” said state Rep. Jim Merrill, R-Daniel Island, pictured at right. “Other than a Saturday -- or Sunday, which is off the table for me -- I don’t think there would be much difference.”

Merrill agreed that moving voting day to Saturday would help because Tuesday voting “hinders turnout and I believe both parties will benefit from additional supporters of the respective parties being able to vote on a day that does not conflict with work.” He aptly pointed out, however, that moving fall voting to December might get around college football season, too.

Already there is some experimenting with weekend voting. This November in Georgia, there will be some Sunday voting in DeKalb County. In 2008 and 2012 in South Carolina, presidential preference primaries were on Saturdays, not Tuesdays. 

Moving voting to Saturdays could reduce the need for other voting changes seen in other parts of the country but absent in South Carolina: true early voting without excuse restrictions, no-excuse absentee voting by mail or all-mail voting. 

While we wouldn’t oppose mandatory voting in elections as is done in Australia, it probably wouldn’t ever fly here in the United States because of our libertarian tendencies. 

“It is a right and a responsibility,” Merrill said of voting. “The very least someone can do to participate in our republic is to take a few moments out of their day, once every two years or so, to vote.  People left their families, fought and died so we could have a participatory government.”

Andy Brack is editor and publisher of Statehouse Report.  He can be reached at:  brack@statehousereport.com.
Spotlight

The South Carolina Education Association

The public spiritedness of our underwriters allows us to bring Statehouse Report to you at no cost. This week's spotlighted underwriter is The South Carolina Education Association (The SCEA), the professional association for educators in South Carolina. Educators from pre-K to 12th grade comprise The SCEA. The SCEA is the leading advocate for educational change in South Carolina. Educators in South Carolina look to The SCEA for assistance in every aspect of their professional life. From career planning as a student to retirement assessment as a career teacher, The SCEA offers assistance, guidance, and inspiration for educators.
My Turn

USC collection to highlight Goldwater campaign’s 50th anniversary

By Herb Hartsook
Special to Statehouse Report

SEPT. 19, 2014 -- It’s the 50th anniversary of Barry Goldwater’s 1964 presidential campaign, which caught the hearts of many South Carolinians and helped create an environment in which a nascent Republican Party began its rise to parity and eventual domination of South Carolina.

A South Carolina Political Collection exhibit in the University of South Carolina Hollings Library’s Brittain Gallery from October 16 through November will celebrate the anniversary and feature campaign ephemera. The exhibit is called “In Your Heart, You Know He’s Right: 50th anniversary of Barry Goldwater’s 1964 Presidential Campaign.”

Neal Thigpen, a historian of the state Republican Party, wrote a guest column for the Florence Morning News on Dec. 5 1977, titled “South Carolina Was Key to Goldwater Candidacy.”  In that column, he traced the origins of the Goldwater boom of 1964 to events in South Carolina in 1959 and 1960.  The following is an extensive quote from that article:

"It all began in the fall of 1959 when South Carolina Republican chairman Gregory D. Shorey Jr. brought Goldwater to Greenville to speak at a party banquet.  There and over statewide television he introduced the senator as his choice for the 1960 Republican nomination.  Goldwater evidently didn’t take Shorey very seriously at the time.  But many people who attended the banquet that evening and thousands more who saw the television program, took Shorey’s endorsement to heart. In fact, the response to his announcement was so encouraging that Shorey and Roger Milliken, the state party’s finance chairman, invited Goldwater to come to Columbia to deliver the keynote address at the 1960 state convention.  The speech the Senator gave that day unwittingly won him the unanimous support of the more than 500 Republicans at the gathering.  Before they adjourned, South Carolina’s 13 national convention votes were officially pledged to Goldwater for president.  Not wishing to appear a political orphan in his own home state, the senator got Arizona Republicans to back him as a favorite-son, intending all the while to throw his support to Richard Nixon.
 
"But by July, when the Republican national convention opened in Chicago, pressure on Goldwater to become a bona fide candidate and to seriously oppose the vice president for the nomination had begun to build.  Volunteers from the Goldwater-for-President Committee, which Greg Shorey headed, scurried about the convention hotels attempting to line up delegate support.  Goldwater realized, however, that Nixon had the nomination sewed up, and he decided t discourage those working on his behalf by releasing the delegates formally pledged to him so they could cast their ballots for the winner.

"Members of the South Carolina delegation, from its leaders, Greg Shorey, Roger Milliken and Robert F. Chapman, who later succeeded Shorey as state chairman, down to the last alternate, urged Goldwater to remain in the contest.  Many argued that he should at least allow his name to be placed in nomination.  By so doing, he could then make a withdrawal speech to the convention that would give him and the conservative cause he represented invaluable nationwide television exposure.  Reluctantly, Goldwater went along with the South Carolinians.
 
"That night, to the thunderous applause of the delegates, the senator mounted the convention rostrum and asked that his name be withdrawn from nomination.  In his now famous address, he expounded his conservative political philosophy and urged his followers to stay within the party: Let’s grow up, conservatives!  If we want to take this party back, and I think we can someday, let’s go to work!  Goldwater did work loyally for the Nixon-Lodge ticket and the South Carolinian Republican returned home more determined than ever to make him the party’s presidential nominee four years hence. . . ."

The South Carolina Political Collection holds a number of collections (and oral history interviews) documenting the rise of the Republican Party in South Carolina.  A number of our collections include wonderful ephemera documenting the Goldwater campaign.  The collections of Greg Shorey, Charles Boineau, and, surprisingly, Democrat Bryan Dorn, are particularly rich in Goldwater material.  Please plan to visit starting Oct. 16, see a little of what captivated South Carolinians just 50 years ago, and marvel at the changes in our political landscape.

Herb Hartsook is director of the South Caroliniana Library at the University of South Carolina. The column above is the first of several posts to the SCPC’s blog, A Capital Blog, on the Goldwater campaign 50 years ago. Click here to find more.

Scorecard

Four up, four down

Domestic violence. Hats off for the special House study committee on domestic violence for hearing from experts on things that can be done to reduce violence by men against women, such as taking guns away from those convicted of criminal domestic violence. Just make sure you do something about it. More.

Club for Growth. Congratulations to this conservative organization for stepping outside of its comfort zone and endorsing someone who is not a Republican. Feels kind of good, doesn’t it?  More.

Sabb. Congratulations to S.C. Rep. Ronnie Sabb, a Williamsburg Democrat who won his party’s primary to replace the seat formerly held by Lt. Gov. Yancey McGill. Because there is no opponent in November, Sabb will become the state’s newest senator after the November election. More.

Lucas. Thumbs up to Acting House Speaker Jay Lucas, R-Hartsville, for moving quickly to get more action on roads and for naming a group to look into ways to make the House more open and accountable. 

Offshore drilling. Despite a new study that says offshore drilling for gas and oil could be a net win for the state, you won’t convince conservationists or tourists of that. Two words: Deepwater Horizon. (Because if anything is going to screw up anywhere, you know it will happen in South Carolina.)  More.

DSS. The state Department of Social Services still can’t seem to get its act together.  Independent Republican gubernatorial candidate Tom Ervin called this week for a special legislative session to deal with the agency. (It won’t happen.) Democratic gubernatorial candidate Vincent Sheheen called for a federal probe of the agency. (It might happen). And a state Senate oversight committee had to order the agency to come up with a quick plan to hire more staff that it says it needs.  It’s a pretty sad situation when an agency already under scrutiny doesn’t appear to have the common sense to get an action plan on its own. More.

S.C. roads. For a couple of years, we’ve reported that the state’s roads and bridges need $30 billion to pay for fixes to bring the system up to par. Now it looks like the number is $42 billion by 2040. Geez. Again: Time to do something, lawmakers. Not the time to keep doing nothing. More.

Sanfords. The continuing saga of Mark Sanford, his jilted Argentine fiancee and ex-wife Jenny Sanford again is embarrassing the whole state. Too. Much. Information. 
credits

Statehouse Report

Editor and Publisher: Andy Brack
Senior Editor: Bill Davis
Contributing Photographer: Michael Kaynard

Phone: 843.670.3996

© 2002 - 2014 , Statehouse Report LLC. Statehouse Report is published every Friday by Statehouse Report LLC, PO Box 22261, Charleston, SC 29413.
Excerpts from The South Carolina Encyclopedia are published with permission and copyrighted 2006 by the Humanities Council SC. Excerpts were edited by Walter Edgar and published by the University of South Carolina Press. Statehouse Report has partnered with USC Press to provide readers with this interesting weekly historical excerpt about the state. Republication is not allowed. For additional information about Statehouse Report, including information on underwriting, go to http://www.statehousereport.com/.