Gov. Henry McMaster and state business leaders have built a growing consensus around the idea that our state’s top financial need is to replenish the unemployment insurance trust fund, so businesses won’t get stuck paying for layoffs borne of COVID-19 shutdowns.
Our state’s top financial need right now has to be ensuring that the coronavirus pandemic doesn’t set students even further back than they already are as a result of the less-than-adequate out-of-classroom education most of them received after classrooms were closed in March. And our second priority has to be making up ground so many students lost when, for a third of the school year, they relied on internet classes and, in many cases, paper workbooks without remote instruction.
To be sure, our state needs to replenish the trust fund at some point, with either federal funds or state tax revenue that we all pay. Businesses should not have to pay higher rates to cover benefits for people they laid off because the governor ordered them to stop doing business, or even merely because the pandemic dried up their business or they made the socially responsible decision to close for the safety of their employees and customers.
But the key is “at some point.”
We started March with about $1.1 billion in the trust fund, the amount state officials projected would be needed to last through a typical recession. But the unprecedented number of job losses has cut the fund by half, leaving a balance of around $560 million. State law requires the Department of Employment and Workforce to begin replenishing the fund once any loans are repaid and the economic contractions pass.
So if the Legislature doesn’t agree this coming week to use $500 million in federal Coronavirus Relief Fund revenues to replenish the trust fund right away, it won’t mean businesses’ taxes will go up. It will simply mean that the Legislature … didn’t replenish the trust fund right away. Taxes don’t have to be raised unless the balance is still down by the time the economy turns around. Which, unfortunately, won’t be right away.
But if the Legislature doesn’t make sure our schools have the resources they need — for summer school, extra school days this fall, extra teachers to keep kids safely distanced in classrooms and extra instructional efforts if in-person learning is shut down again — many children will not catch up. Ever.
Mr. McMaster and his accelerateSC task force say that with $1.9 billion in federal funding for the government’s response to COVID-19, there’s plenty of money to put the first $500 million into the unemployment trust fund and still cover $270 million that state agencies, colleges and local governments spent in response to the virus through mid-May … and $223 million for face-to-face summer academic recovery camps for 25,000 students in kindergarten through third grade and five extra days of instruction for 4K through eighth-graders … and $125 million to help hospitals recover from their virus-related costs … and $50 million for internet broadband mapping, planning, infrastructure and mobile hotspots … and $42 million for DHEC’s statewide testing and monitoring.
But that plan doesn’t cover all the expenses state and local agencies have racked up so far, much less $350 million more they expect to spend through December. More importantly, it pays for a much smaller summer program than many educators recommended. And frankly, we’re not sure those five extra days at the start of the year will do the job that needs to be done to get kids back on track.
Federal law requires the $1.9 billion to be spent by Dec. 31, and the governor already recommended that any money not spent by Dec. 30 be diverted to the unemployment trust fund, so it won’t be lost. That’s an excellent idea. But instead of putting $500 million into the trust fund immediately, lawmakers should put in a smaller amount now, say $200 million, so they can make sure we don’t have to skimp on the coming school year because we ran out of money. If we don’t need that extra money, then it can go to the trust fund on Dec. 30.