Commission again misses tax deadline

COLUMBIA -- The troubled Employment Security Commission failed again this month to pay its taxes on time.

Rodney Welch, communications specialist for the jobless benefits agency, said officials discovered in mid-February that the agency was two weeks late on paying its withholding taxes.

"Once this was realized, payment was made immediately," Welch said.

Welch did not provide details on the late payment, such as how much money was involved, or whether the state might be penalized.

Officials at the S.C. Department of Revenue and the Internal Revenue Service declined to provide information on the matter, citing disclosure laws that stop the agencies from sharing taxpayer information.

Gov. Mark Sanford's communications director, Ben Fox, said the failure to pay taxes is the latest example of why the commission needs an overhaul, a cause the governor has championed since 2008.

"Simply astounding, and another disturbing exhibit in what should be an open-and-shut case for accountability and real reform at the ESC," Fox said of the late taxes.

The Senate has spent the last two weeks discussing a plan aimed at reforming the agency. The House passed its version last week.

The efforts come on the heels of a Legislative Audit Council review of the agency that showed widespread mismanagement. The agency also is under fire for its performance during this recession.

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Earlier this month it revealed that the agency did not pay $16 million in state or federal incomes taxes it withheld from benefit checks from February to May 2009.

The agency faced nearly $1 million in penalties, but the state Revenue Department dropped the interest and fine to $25,000.

Bill Funderburk, deputy executive director for Unemployment Insurance, said a process has been put in place to assure timely payment of claimant withholding taxes.

Funderburk, who served as general counsel for the agency, was put in the deputy position Tuesday after two senior employees, Allen Larson and Jimmy Jones, left the agency. Welch would not discuss the terms of their departures, saying it is against the agency's position to discuss personnel matters.

The agency is now under the management of interim Executive Director Sam Foster, who took over when Ted Halley retired last year.