MOTHBALLED. This isn’t something you see every day — a bunch of mothballed Coast Guard helicopters, which are located in rural Williamsburg County. “These old Coast Guard helicopters have been accumulating on the grounds of the old Hebron School,” notes photographer Linda W. Brown of Kingstreet. “After the school closed, the building was used as a ‘sewing plant.’ Once it, too, closed, it appears that the owner is using the grounds for helicopter ‘storage.’ Note the guard dog! ” More at the Center for a Better South.
STATEHOUSE REPORT | Issue 14.20 | MAY 15, 2015
NEWSTime ticking down on roads funding
By Bill Davis, senior editor
MAY 15, 2015 | There are more moving parts in the deal to get new roads funding passed in the legislature than there are in a watch, and time is running out.
With only nine work days left in this year’s legislative session, some are wondering if the General Assembly will even get to pass a bill on the state’s $40-billion-and-climbing roads deficit.
While the House passed a new roads funding bill last month, the Senate is snarled in a political knot over other pending issues that have procedural priority over what some are calling the most important issue of this session.
Sitting next on the Senate agenda are bills related to abortion and tweaking the state’s Capital Reserve Fund. That means precious time next week has to be spent on them before roads funding can be dealt with.
And even then, it’s going to be tough because passage of the state’s budget also looms.
Late last month, the House passed a roads funding bill that calls for a 10-cent increase in the state’s gas user fee. The dime increase falls short of the DOT’s request for more than $1.4 billion annually to get the state’s road system up to “good” in the coming decades. Raising the per-gallon fee to 26-cents also falls short of state regional gas taxes.
But Gov. Nikki Haley said in her State of the State Address in January that she would veto any roads funding bill fueled by a gas tax increase unless there was a corresponding cut to the state’s income tax rates. Haley has called for a 2-percent cut in the income tax rate that would drop it from 7 percent to 5 percent. She has also said the executive branch, namely her, should take over on setting the state’s contentious roads project building priority list.
In the Senate, a Republican-led plan piggybacks on the House bill, but includes a higher per-gallon increase, gives Haley and the executive branch nothing in terms of roads projects governance, and reduces the amount of income tax decrease from 1 to 2 percent, and phases it in over five years. A smaller and less controversial part of the roads funding package would be the increasing of fees, such as for driver’s licenses and the like.
An opportunity
State Sen. Paul Campbell (R-Goose Creek) said this year may be the legislature’s best chance for years to deal with roads funding “because next year is an election year.” 2015 was the rare year when there were no elections for House, Senate or statewide offices.
Campbell said election years make it much more difficult to even contemplate increasing the gas tax, even though it is technically a user fee, and a big chunk of the load would be shouldered by cars from outside the state. He also said his caucus’ offsetting plan would be better than revenue neutral, as it would result in a $100 million overall tax reduction annually in 2021 when it would be fully phased in.
But, he said, he doubts there will be much interest from Senate Democrats because the income tax reductions’ fiscal impact wouldn’t be as much for their constituents as they would for some Republican voters.
State Sen. Joel Lourie (D-Columbia), point man on the other side of the aisle after serving on the original subcommittee looking into the gas tax increase, said “no one is calling me up asking to reduce their tax bill – they’ve calling me up to fix the roads they drive on.”
Lourie agreed that the income tax cut was a non-starter with fellow Democrats. He called for separate bills that weren’t joined at the wallet, taking away the offsetting cuts for the gas increase.
“Going back to my freshman year in the House, we have never had a dedicated funding source for roads – it’s time we did,” said Lourie, who said his colleagues don’t want to give the governor power over the priority list, either.
But, Lourie said, the “good news” was that both sides were finally talking about the issue and that once the Senate agenda is cleared “the public will get the debate they deserve.”
For all the seeming obstacles, the debate could be welcomed by the Republicans, who seem to be in a win-win situation, especially if they can reduce income taxes on the wealthy, who would benefit the most directly, and smooth over the roads the wealthy drive their tony cars.
But can Spartanburg GOP Sen. Lee Bright, who in the past has called for the state to print its own money and eschew the federal dollar, be dealt with? He could continue his filibuster over the abortion bill and further eat up precious legislative time.
On Thursday, a motion failed to remove Bright’s abortion bill from the docket, meaning it will be held over for interrupted debate on Tuesday. Then there’s the Capital Reserve Fund tweaking. And then the resulting package would have to pass muster in the House, and a certain conference committee vote between both chambers, and survive a potential veto slash from Haley, who has shown signs of compromise since her staunch January speech.
All that. In nine days.
“We can always include it in a sine die resolution,” said Campbell, referring to a procedural maneuver that allows the legislature to reconvene after its scheduled end date to debate and potentially overcome gubernatorial vetoes and deal with specific items and pieces of legislation.
So, instead of “kicking the can down the road” until next year, an election year, the legislature may end up waiting to vote on roads and gas tax rates until late June.
COMMENTARYWhy incentives for Volvo make sense
By Andy Brack, editor and publisher
MAY 15, 2015 | The $204 million incentive package that state and local governments offered Volvo to make a huge investment for at least 2,000 jobs in Berkeley County masks a pesky public policy debate that few talk about in public: Are incentives a good deal or should they exist at all?
On one hand, we wouldn’t have landed BMW, Boeing or Volvo without incentives. That’s just the reality of economic development. Because of incentives, these companies hired a lot of people and served as a catalyst to generate thousands of other in-state jobs — everything from suppliers to fast-food workers to staff restaurants that serve them.
Furthermore, incentives make sense, many argue, because they will eventually be paid off through steady infusions of revenues from sales, income and property taxes from the thousands of workers who get new jobs. It will just take a little time — and it’s in the government’s interest to invest now to get a long-term return on investment.
On the other hand, use of incentives is particularly interesting because it’s being pushed by the ruling Republican Party, which often goes overboard in its zeal to denounce “activist” government. If anything is “activist” and should raise the blood pressure of those who drink conservative tea, it’s using the power of big government to build incentive packages.
Wouldn’t it be fairer, economist Frank Hefner of the College of Charleston has argued, to completely rewrite tax policy to level the playing field and make it so that you don’t need tax incentives to lure big businesses here?
“The only reason you need to offer incentives is because you’ve created disincentives,” Hefner said. “I’d prefer a simplification of the tax code for everyone. If property taxes are too high for Boeing, then they’re too high for a lot of other businesses.”
A study done by Hefner as part of the Volvo project shows the annual economic impact to the state to be almost $4.8 billion a year in direct and spin-off effects through payroll, taxes and more. According to the study:
“Once the plant is up and running at the completion of Phase 1, it is estimated that 2,000 jobs will be directly employed at the plant. This will result in a total of 8,052 jobs within the state. Total labor income is estimated to be over $517 million with a total economic impact of over $4.7 billion. Over $72 million will be collected in state and local taxes annually. (This amount could potentially be reduced depending on incentives offered.)”
That’s a pretty good return on investment … and will add up pretty quickly, although it doesn’t factor in the incentive package’s impact on taxes.
Still, others wonder about the fairness of providing big incentives to big businesses at the expense of small businesses, which have to pay full freight on things like property tax and other expenses for government.
“When a big business moves into the state, it employs workers who help build local economies by purchasing goods and services from local small businesses,” said Frank Knapp, head of the S.C. Small Business Chamber of Commerce. “But while we appreciate these state government efforts and welcome these businesses, there should also be a commitment from the state to promote local economies by supporting the creation and growth of small businesses when big business recruitment is not part of the equation, especially in rural areas.”
With Volvo, lots of rural communities will benefit because their residents will travel to Berkeley County for jobs. Santee Cooper, which is purchasing 6,800 acres with Berkeley County as part of the deal, is involved because the deal fits the utility’s mission to promote economic development and create opportunities for small business retailers and service providers.
“Additionally, to the extent these projects improve the general welfare in terms of jobs and income, they create more disposable income for people to spend at small businesses,” said spokesman Mollie Gore.
Bottom line: Yes, it’s politically hypocritical for big government opponents to make hay through big government’s strength to offer incentives. Yes, the tax code needs to be fairer. But it’s far better for the state to have a big new corporate citizen like Volvo than to quibble now.
IN THE SPOTLIGHTElectric Cooperatives of South Carolina
The public spiritedness of our underwriters allows us to bring Statehouse Report to you at no cost. This week’s spotlighted underwriter is the Electric Cooperatives of South Carolina. More South Carolinians use power from electric cooperatives than from any other power source. South Carolina’s 20 independent, consumer-owned cooperatives deliver electricity in all 46 counties to more than 1.5 million citizens. As member-owned organizations, cooperatives recognize their responsibility to provide power that is affordable, reliably delivered and responsibly produced.
- More at www.ecsc.org or www.scliving.coop
Blueprint for a better future
“We cannot solve our problems with the same thinking we used when we created them.” — Albert Einstein
By Mike Couick, special to Statehouse Report
MAY 15, 2015 | During the past few months, I have gotten to know some of the brightest young minds at the University of South Carolina, and the experience has inspired me to take a very optimistic view of our energy future.
It was my privilege to serve as part of the teaching team for IGERT 720: Public Energy Policy, a graduate course for chemists and engineers sponsored by the National Science Foundation and South Carolina’s electric cooperatives. IGERT stands for Integrative Graduate Education and Research Traineeship Program, and the nine students in the course all hold impressive academic and scientific credentials. The task of the teaching team was to help these young scientists explore the world beyond the laboratory, where their work will intersect with politics and business.
The course focused on one of the biggest problems (an optimist might say opportunities) in the energy sector today—how to deliver affordable and reliable electricity while achieving the carbon-dioxide reductions called for in the Environmental Protection Agency’s Clean Power Program.
This is no easy task. The proposed regulations require South Carolina power plants to reduce carbon-dioxide emissions 51 percent by 2030, the most demanding reduction target in the nation. Electric cooperatives, investor-owned utilities, environmental groups and state regulators are all working together to develop a state implementation plan (SIP) following four EPA-mandated building blocks. For their course project, we assigned the IGERT students to work in teams to develop their own SIPs focusing on two of these building blocks—improving energy efficiency and developing new sources of renewable energy.
To help our students hone their ability to pitch science-based solutions to political and business leaders, we added another twist to the assignment. In a format inspired by the television show “Shark Tank,” we had the teams present their plans in a public forum before a distinguished panel of energy-policy experts: U.S. Rep. James Clyburn, the third-ranking Democrat in the House of Representatives; Hamilton Davis, energy and climate director of the Coastal Conservation League; Myra Reese, chief of the S.C. Department of Health and Environmental Control’s Bureau of Air Quality; Dukes Scott, executive director of the S.C. Office of Regulatory Staff; and James Spiers, vice president of business and technology strategies for the National Rural Electric Cooperatives Association.
Rising to the challenge, the students delivered their blueprints for a brighter energy future with confidence and poise, even in the face of some tough questions from the panel. More important, all three of their proposals reflected the kind of new thinking that Einstein would have loved. The IGERT students did more than run the numbers on kilowatt hours produced and tons of carbon dioxide saved; they considered how the costs might be fairly allocated, as well as the positive economic benefits that renewable energy could bring to South Carolina.
The team of Bobby Barker, Elizabeth Barrow and José Contreras-Mora took the top award from the panel, but the experts were quick to praise all three proposals. “The plans are incredibly smart,” Dukes Scott said. “Somewhat idealistic, but very smart.”
“I have a great feeling of confidence in our young people,” Rep. Clyburn said. “The ingredients are all here in South Carolina to do what the EPA wants us to do.”
As a result of my experience with IGERT 720, I share the congressman’s optimism, and I am more convinced than ever that this generation of young scientists will find the solutions to our energy and environmental issues. Our future is in good hands—or, more accurately, some very capable minds.
Mike Couick is president and CEO of the Electric Cooperatives of South Carolina. This column originally appeared in the organization’s South Carolina Living magazine and is republished with permission.
SCORECARDThumbs up for state’s leaders, more
Thumbs up
State leaders. Woo-hoo! What else can we say about the Volvo deal that will change people’s lives. Congratulations to Gov. Nikki Haley, Commerce Secretary Bobby Hitt, Santee Cooper President and CEO Lonnie Carter and the host of leaders who lured the company to locate in South Carolina.
Weapons bill. It’s good news that a bill that sought to get rid of training requirements for people to have concealed weapons permits apparently won’t fly this year. Giving guns to people who don’t know how to use them properly is sheer lunacy. More.
Greenville. Hats off to the Upstate city for ranking second in a Gallup survey of the nation’s cities with the most pride. We’re proud of you too. More.
New voting machines. It’s about time that the state got new machines. Let’s hope the new ones can be more accountable than the ones we now have. More.
Academic Magnet. Congratulations to the North Charleston high school, named the seventh best in the nation. More.
In the middle
Body cameras. It’s probably a good thing that the state passed a law to require police to have body cameras, but remember that technology can’t solve all problems — and body cameras can be turned off. Focus more on deepening community trust.
Thumbs down
Bright’s double whammy. Abortion opponent State Sen. Lee Bright, R-Spartanburg, is filibustering a bill on a 20-week abortion ban — because he doesn’t like the bill’s exceptions. But more importantly, he’s abusing his public position in a larger context because he doesn’t like what’s up next either — a bill to fix South Carolina’s terrible roads — which is ultimately is delaying Senate action.
Hardwick. Horry County politician Nelson Hardwick resigned this week from the S.C. House in wake of a possible sexual harassment probe, but then tried to rescind the resignation. Too late. More.
Georgetown Steel. The rusty old mill has been a backbone of Georgetown for years. We’re saddened to hear of its closure. We’re even more irritated at the reason — unfair foreign competition.
QUOTEIt’s a great day in South Carolina
“What I believe won Volvo cars in South Carolina was our workforce. Because they saw the fact that is a state where (we) build planes, we now have three car companies, we now have five tire companies. … So what they knew was if we build it, we build it well. And we build it with quality. And we build it with loyalty. And we build it with pride. And that’s something you just can’t find anywhere.”
— Gov. Nikki Haley.
S.C. ENCYCLOPEDIASgt. William Jasper
Little is known of Revolutionary War Sgt. William Jasper’s origins. Traditionally he has been identified as Irish, but others have argued that he was of German ancestry.
On July 7, 1775, in Halifax District, Georgia, William Jasper enlisted in the elite grenadier company of the Second South Carolina Continental Regiment. On June 28, 1776, as a sergeant, he won lasting fame during the British attack on Sullivan’s Island, near Charleston. When an enemy shot brought down the fort’s flag, Jasper restored the banner while under enemy fire. In 1779 he led dangerous guerrilla raids against British pickets and patrols. At least once, he passed through enemy lines by posing as a deserter.
During the Franco-American attack on the British lines around Savannah on October 9, 1779, Jasper received a mortal wound while rescuing one of his regiment’s flags. He had placed another flag on a British entrenchment, which is now preserved in the Smithsonian Institution. Jasper left a widow and at least two children, although apparently no descendants are living today.
Jasper became a national hero as a character in the historical novel by Mason L. Weems, The Life of Gen. Francis Marion (1809). Weems based this work loosely on a manuscript by Peter Horry. Although Horry dismissed Weems’s book, he and other Revolutionary War veterans confirmed Jasper’s great personal courage. Eight counties (including Jasper County, South Carolina), numerous towns, and thousands of Americans were named for the man described as “the Brave Sergt. Jasper.”
We Can Do Better, South Carolina!