Here's one of those little things that come in over the transom that make you go, "Huh?", and then you realize that actually, they explain quite a lot:
OP-ED EDITORS FOR IMMEDIATE RELEASE
Friday, January 09, 2009
South Carolina Unemployment Insurance Needs Reform, Not
Bailout
By Matthew Glans
As in many other states, South Carolina’s unemployment fund is nearing
insolvency due to the growing number of unemployed. The unemployment insurance
program is in dire need of reform, and proposals have been made to raise
employer premiums or cut benefits to help bring the fund back into balance. But
these reforms are a patch job at best.
Governor Mark Sanford (R) understands a federal bailout of the state fund
will inevitably lead to a hike in businesses taxes to cover the rising cost of
unemployment insurance. Some projections predict a possible doubling of the
current tax rate. But increasing the cost of doing business in that way will
suppress economic growth and drive more businesses out of the state—thereby
increasing the burden on the unemployment fund even further.
Tax increases and government bailouts won’t address the systemic deficiencies
but instead will allow the existing problems to survive and continue to grow.
Real reform that fundamentally re-examines the state’s role in providing
unemployment benefits is what’s needed.
With its unemployment rate reaching 8.4 percent in November and payouts of
around $14 million a week depleting the unemployment fund to nothing, the state
recently requested a supplemental line of credit of $15 million from the federal
government to keep the fund afloat through the end of the year. Unemployment
officials are requesting an additional $146 million for the first quarter of
2009.
Sanford approved the request only after the Employment Security Commission
agreed to an independent audit of the program—which should have been done long
ago. The Commission initially resisted this push for increased accountability,
preferring an internal audit instead. To his credit, the governor stuck to his
guns and demanded the Commission be held accountable for its role in the
depletion of the fund.
For the past seven years, South Carolina’s unemployment fund has faced a
fiscal imbalance, with more being taken out through claims than was received
through premiums paid by employers. South Carolina’s unemployment fund has seen
a steady decline since 2001, dropping from $800 million seven years ago to being
virtually exhausted today.
Sanford is being unfairly attacked both in the media and by fellow
legislators for not blindly reaching into the government bailout trough. His
proposal to audit the Commission as a prerequisite for a federal loan is a
positive step that will provide solid evidence to encourage citizens and
legislators to support change.
Given the state’s record of poor management of the funds, privatization
through individual unemployment accounts may be the best option. Individual
unemployment accounts are a mandatory and portable individual trust to which the
employer and employee contribute. These accounts shift control and
responsibility for unemployment coverage from the employer and the state
government to the employer and the employee. They offer the flexibility and
individual choice many employees currently lack, allow individual employees more
control over their money (which follows them from job to job), and lessen the
administrative burden on the state.
Before injecting another $146 million in taxpayer dollars into an ailing
system, it’s important to know where the tax revenue is currently going, whether
adequate measures are in place to ensure applicants are moving through the
system and finding new jobs, and whether there is a concentrated effort to
combat fraud. Sanford’s request for an independent audit is a prudent one, and
these efforts could lead to the identification of systemic deficiencies and
encourage real reform.
Matthew Glans ([email protected]) is a legislative
specialist for The Heartland Institute.
Basically, what this illuminates is that, as usual, our governor's focus is NOT on South Carolina and what it needs or does not need. It is on playing to these national libertarian groups — this one, the Club for Growth, the editorial board of The Wall Street Journal and the like — for whatever national purposes he and they have.
These battles — over unemployment benefits, school vouchers — aren't actually FOR or ABOUT the people of South Carolina, whose actual lives are merely the pawns in these ideological posturings.
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This is what Sanford does with his position as governor — campaign for the Club for Growth/Grover Norquist Fan Club presidency rather than serve the people of South Carolina. It amazes me that so many continue to believe that he is their champion against entrenched interests, when he is above all a protector of entrenched interests.Many of the legislators are no better, they are in conflict with Sanford over his grandstanding style, not substance.It really seems hopeless.
This is what Sanford does with his position as governor — campaign for the Club for Growth/Grover Norquist Fan Club presidency rather than serve the people of South Carolina. It amazes me that so many continue to believe that he is their champion against entrenched interests, when he is above all a protector of entrenched interests.Many of the legislators are no better, they are in conflict with Sanford over his grandstanding style, not substance.It really seems hopeless.
The last time I checked (because I was considering hiring people there), NC and GA had the same unemployment tax rates, but paid out twice as much on the top end as SC.
So how can SC be going broke so fast, when NC and GA pay out almost twice as much per week to the unemployed worker?
I wouldn’t call CFG libertarian: they’re strongly in favor of government spending and government intervention in the free market… when that spending/intervention is to the benefit of large corporations and wealthy individuals. Those pore ole bosses need all the help they can get, you know.
The Heartland Institute, Cato Institute, Club For Growth, and other libertarian think tanks ignore the root cause of South Carolina’s high unemployment rate and how to fix it, because, well, they are ashamed to admit that it makes their boy for president, Mark Sanford, look bad and irresponsible.
Ralph,
You keep dodging the question: “What has Mark Sanford done that has caused the problem?” Which Sanford programs have failed?
How about some specifics for once?
“What has Mark Sanford done that has caused the problem?”
Nothing! Actually, that is the wrong answer to your question; it is sort of like the “are you still beating your wife?”
My answer answers “What has Mark Sanford done while governor?”
Doug,
What has Mark Sanford accomplished in office?
Don’t be a sourpuss, Ralph, who can’t come up with any facts to pin on Mark Sanford. Just tell us the real “reason” you don’t like him, and move on.
SC is full of unemployable illiterate dummies, dropouts who were unwanted babies of unwed teen mothers, most of them black. That is not Mark Sanford’s fault. It isn’t the fault of married, working, taxpayers.
If you want to blame someone besides the irresponsible mothers and fathers, blame the liberal culture which told them to do whatever they feel like, and come on down to the local handout offices later.
Sanford is not a libertarian. He is just a conservative Republican who believes in smaller government in the economic sector (unlike the rest of his party). He still believes in all the other bull—- social/cultural issues that his ilk thrusts onto the American people to force us into their cultural conservative/religious lifestyle (and to scare up votes from the Christian Right sheep).
Mark Sanford. Not a libertarian. Still a piece of crap.
So, Ralph, if I understand you correctly, the economic condition in South Carolina today is a direct result of what Mark Sanford has not done and is not connected in any way to the taxation and spending policies of the state legislature?
I also await your examples of programs enacted by Beasley, Hodges, and Campbell which directly resulted in expanding the economic strength of the state. Obviously my recollection of the state’s economy going back to 1990 must be missing those key programs they put into place that Mark Sanford somehow destroyed.
You place the blame on the wrong guy.
I have already stated the reason why Mark Sanford is a poor governor and being a Republican is not one of the reasons.
David Beastley and Jim Hodges were also “do nothing” governors. But during their terms, at least South Carolina’s economy mirrored the nations. There, I blast a Democrat and another Republican.
At least Campbell got out of his office and recruited industries to come to South Carolina.
—
Those unemployable illiterate dummies, dropouts who were unwanted babies of unwed teen mothers are not factored in South Carolina’s unemployment numbers. There are plenty of literate and skilled formerly employed that lost their jobs to layoffs or business closings.
Actually, the SC economy has done better than the nation for the last 6 years, but tracks it.
The Bush tax cuts ended the recession inherited from Clinton, and the booming economy in 2003-2007 showered the state with $4 BILLION in unexpected, surplus revenues, even with a property tax cut on homes.
Instead of paying off high-interest debt, the irresponsible legislature blew the surplus like it would never end. They were expecting an extra $1.2 BILLION this year, and jacked up their “budget” to consume every penny. Now the economy has gone flat with the collapse of the Democrat’s corrupt mortgage programs, and they are crying about a “budget crisis”.
They are lying. The newspaper is lying.
Tax revenues are still on track to deliver $100,000,000 more than last year.
When the cupboard is bare, who do you look to to fill it and who do you hold accountable for it being empty? The unemployment fund is out of money and we have to go to the federal government for a bailout. The agency in charge of the money is not accountable and from all indications, is not a good steward of the funds it controls.
Unless I don’t understand the system, unemployment benefits are supposed to be for a six month period and last only until a job can be found. If no job can be found, the unemployed is no longer eligible to draw from the fund and supposedly there are other agencies available to assist afterwards.
Sanford aside, what is wrong with asking for, no demanding public accountability for how the agency operates, how it determines who is eligible, how the money is spent, and other oversight regulations? We have witnessed what happens when any agency or business is allowed to conduct its own “internal audit”.
This agency is supported by a state tax system and there is no good reason it shouldn’t be held accountable. Perception almost always trumps reality and is the problem in this particular case. Sanford is doing what he should have done a long time ago but apparently didn’t have enough clout to push it through. He took advantage of the situation and now if reports are true, we will have some accountability. What is wrong with that or is everyone who dislikes or disagrees with Sanford too immature to acknowledge it?
Sanford is doing now, in his last term as governor, what he could not do in the first term because he wanted to be re-elected.
He wants accountability for taxpayer money. We talk about government money on these blogs but we should be saying our money.
You can drive by the unemployment office in my county on the day of the month the unemployed have to sign up and report their search for jobs and the parking lot and street are loaded with big late model cars. Nothing wrong with that but who is going to make the payments when the unemployment checks run out? If you are unemployed and can buy a new car, what is wrong with this picture?
By the way if you are having trouble with getting your unemployment, just contact John Spratt. Every time a industry closes in his district you can expect and article in the paper stating how he is assuring the people that lost their jobs that he will see that they get their unemployment and training and extended benefits.
I hope that Gov. Sanford continues to stick his finger in all the pies in SC government before his term runs out. The only problem with this approach is that the legislature wants to be re-elected and will probably not go along with him but at least he is trying to do something.
Just a word about the schools and all the associated problems with our uneducated children that left the school system without even the ability to speak understandable English. We have a problem that cannot be solved.
Has the NAACP boycott had any effect on the state’s economy? Have we lost any jobs due to the boycott? Do we still have a NAACP boycott?
The NAACP boycott is a fund-raising stunt, to try to make them relevant, and cover up their string of scandals and misuse of funds by so many officials.
Lots lots of unemployment leads to problem to a nation it lack of national income so this people are providing Unemployment insurance its very nice
Christena
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