S.C. legislators discuss funding, future of state
South Carolina is the only state that has a budget and control board, S.C. Sen. Greg Ryberg, R-Aiken, said Friday.
"This is a quasi-management group that runs the state," he said at a Greater Aiken of Commerce "First Friday" breakfast. "We need to work toward a department of administration and eliminate the Budget and Control Board."
Ryberg was joined at the breakfast by S.C. Reps. Tom Young and Bill Taylor, both of Aiken. Young referred to a S.C. Supreme Court decision, which he said could take away certain private property rights. Taylor discussed tax reform efforts during meetings of a House committee that includes him and Young.
For the past decade, Ryberg said, he has worked on funding issues related to the S.C. retirement system.
"What you have heard nationally is happening here," he said. "The system is grossly underfunded," anywhere from $14 billion to $19 billion.
The system gets 50 percent of its revenue from the markets but cannot consider investing its way out of this situation. Even a reduction to a 7.5 percent rate of return won't be sufficient, Ryberg said. The state has been carrying forward its losses and no longer can continue to do so. The House and Senate have been meeting on this issue for the past three months.
"The problem gets harder to solve as we push this problem further down the road," said Ryberg. "We have a commitment from both sides of the aisle to find some solutions and cannot get there without some modifications. We put almost $1 billion into the retirement system for unfunded liabilities, and that has given you nothing."
The state Supreme Court's 3-2 decision involving an isolated wetland of 0.19 acres in Pawley's Island needs legislation to be overturned, Young said. Smith Land Co. had filled in the wetland after the S.C. Department of Health and Environmental Control and the Army Corps of Engineers indicated they had no authority to issue a permit.
Following a lawsuit filed by the Georgetown County League of Women Voters, the Supreme Court eventually ruled that DHEC does have the authority to issue such permits, said Young. In addition, he said, a pollution control act allows any private entity or person to bring legal action in any type of environmental discharge.
"If you fry something and discharge the grease into the waterways, you're in violation of the pollution control act," said Young. "Legislation would stipulate when it's right for DHEC (to get involved in private land situations). It's an important issue for business and private businesses."
One piece of good news is that participants at a recent economic conference at the University of South Carolina were much more optimistic about the economy than in 2010, said Taylor. South Carolina is projected to be one of the two states that could exceed 4.5 percent growth in the next few years, he said. Sales tax collections are also up.
Still, tax reforming is going to be crucial for the state.
"Let's tax more fairly and free up business people and expand the economy and the job market," said Taylor.
The committee chaired by House Speaker Bobby Harrell has looked at, in broad discussions, the need to simplify the tax code. The industrial property rate of 10.5 percent is too high, although some companies pay a fee in lieu of taxes.
"There's a 6 percent rate on businesses," Taylor said. "There's a lot of concern about that because of Act 388, which reduced taxes on (primary residence) homeowners. We have to look at that."
The legislature also will take a hard look at corporate taxes, Taylor said, acknowledging that, at about $200 million, it's not a great deal of money in a $5 billion budget.
"The State Chamber believes that tax policy is crucial to companies looking to come to South Carolina or expand their existing business," said Taylor. "They recommend an overhaul of the tax code."
Rob Novit has worked at the Aiken Standard since 2001, covering education issues and general assignments.