Unemployment forum: Enforcing change

With one of the nation's worst jobless rates and a drained unemployment insurance trust fund looming as backdrops, top South Carolina officials are trying to change how the state pays benefits to out-of-work residents while encouraging them to find another job.

Dozens of state lawmakers, agency staffers and business leaders convened Tuesday in Columbia for a forum organized by Gov. Mark Sanford, who has pushed for unemployment policy reform. During the three-hour session, experts explained how the Legislature could rein in control over the state's insolvent trust fund and align the network of existing government support services for jobless residents.

Speakers focused less on economic development efforts and more on reforming the state's existing unemployment benefits system that, as one lawmaker put it, "seems (to have made) unemployment a lifestyle."

South Carolina had the sixth-worst unemployment rate in the country for August at 11.5 percent. September's figure will be released today.

Policy experts acknowledged that some economic factors lie beyond the state government's control, such as the gradual loss of manufacturing jobs, the state's growing population and the demand for higher skills among workers.

Lawmakers could still make policy changes to stabilize the state's insurance trust fund, which is the pool of unemployment benefits money that ran out last fall. The state is projected to borrow more than $1 billion from the federal government to continue issuing weekly unemployment checks.

The trust fund's balance, which is funded by employers, has gradually been drained during the last eight years.

The most obvious change would be to raise the per-employee tax that employers contribute, but Sanford cautioned against that move, saying it would be a burden to businesses during a time of extraordinary economic hardship.

"Simply raising taxes would be a colossal mistake," he said.

Instead, getting residents back to work even a few weeks sooner could save hundreds of millions of dollars each year. To that end, experts pointed to states such as Utah, Texas and Georgia that have successfully streamlined their support agencies.

Creating a network between groups that provide social services, adult education and technical college training leads to a state system that encourages residents to find work, said John Stephen of the Boston-based The Lucas Group, an unemployment policy consulting firm.

"It's not about just giving out checks," he said. "It's about personal responsibility as well."

Rebecca Gunnlaugsson, a researcher for the state's Commerce Department, provided data from the state Employment Security Commission that exposed potential areas for reform.

For example, nearly a fourth of workers who have applied for benefits since 2006 were fired for misconduct. Not all of those workers are eligible for benefits, but in 2008, roughly one-fourth of all benefits money went to workers who were fired with cause.

The state also has a high rate of repeat claimants, which Gunnlaugsson tied to several reasons.

South Carolina is one of only nine states that still allow employers to file for benefits on behalf of their terminated workers, a practice that is now largely outdated. That type of claim filing is popular with manufacturers that seasonally shut down, and she said that 10 companies account for a quarter of those overall claims.

Related to that, the state's tax structure could be changed so employers that lay off workers more frequently face higher taxes.

After the forum, Sanford said he was optimistic that some sort of reform could happen, possibly as early as next week, when state lawmakers reconvene to fix an oversight that has led thousands of out-of-work South Carolina residents to miss out on unemployment benefits.

During that session, he encouraged lawmakers to "look at wholesale reform while we have the opportunity to do so."

Meanwhile, another employment issue looms next week: efforts to impeach Sanford.

State Rep. Greg Delleney said Tuesday that next week's session will be his first chance to introduce a resolution he is drafting to remove Sanford from office, The Associated Press reported.

The Legislature adjourned for the year days before the GOP governor skipped the state and left no one clearly in charge so he could rendezvous with a woman in Buenos Aires he called his "soul mate."

"Had we been in session, we would have been looking at it straight away," said Delleney, R-Chester.

Reach Katy Stech at 937-5549 or kstech@postandcourier.com.