COLUMBIA — Politicians talk a big game over why voters should entrust them with the power to make decisions about South Carolina’s economic future, but what specific solutions do they have?
The Post and Courier asked the state’s brain trust to offer one specific plan, within South Carolina’s control, to light an immediate spark in the slumping economy. The answers come from top elected officials, an economist and a member of the creative class.
Take a look:
Gov. Nikki Haley, through her spokesman Rob Godfrey:
“Reform our tax code. We have to be more competitive, and you’ll see us take the first major step in that direction during this legislative session,” Godfrey said.
The governor would not commit to anything more specific, although her executive budget is due out in January and is expected to lay out her plans for state spending.
Action plan: Lawmakers, who return in January, could use Haley’s executive budget as a starting point to develop a $6 billion budget and set policies. Or they could use it as a door stop. It depends on how active and successful the governor is selling her plan to them.
Possible effect on your life: Unknown.
Senate President Pro Tem Glenn McConnell, R-Charleston:
South Carolina leaders can solve the dual rail issue in North Charleston, he said. The city and the state Department of Commerce disagree over how to ensure that two rail companies have access to the Charleston port.
McConnell said that dispute is holding back economic development on the former Navy base. For instance, he said, the Clemson University Restoration Institute’s wind turbine test facility is a springboard for job creation, but the uncertainty with the rail issue could drive investors away.
Action plan: City and state officials must come to an agreement both sides can live with or allow the courts to decide. The timeline on resolution depends on negotiations.
Possible effect on your life: Depending on where the rail lines are designated, residents could be impacted by truck traffic and train stops, among other quality of life issues. Forging a solution that could lead to economic development could land area residents jobs in creative sector, construction industry and work across the spectrum.
House Speaker Bobby Harrell, R-Charleston:
Harrell stuck to his mantra: “True economic recovery and prosperity will come through the power of the private sector. Free markets create jobs, not government.”
The state must build on its recent efforts at economic fixes, such as resetting business rates for unemployment insurance benefits and capping payouts in civil litigation cases.
Harrell said his one, specific idea to jumpstart the economy is to make South Carolina competitive with comprehensive tax reform, but to do so will be a significant undertaking.
“Our Legislature has a fiscally conservative record: cutting government spending instead of raising taxes to balance the budget, increasing reserve accounts and passing $20 billion in tax cuts,” Harrell said, “but our state’s method of collecting tax revenue is unfair in some areas and too high in others.”
Action plan: Tax reform must come from the Legislature. The governor can sign, veto or let legislation become law without her signature. Harrell said the Legislature and governor have made tax reform a major priority.
Possible effect on your life: A change in the way you pay taxes. Tax reform could lower taxes for some and increase it for others, or the state could swap the sort of taxes it collects.
U.S. Rep. Jim Clyburn, D-S.C.:
The state should expand its infrastructure bank, he said. Right now, the state leverages its resources by providing loans from the bank for road and bridge construction and improvements.
Clyburn said the bank should be authorized to provide money for the expansion of water and sewer lines into rural areas, to establish Internet access across the state and build and improve schools. The state could use loans from the bank to draw down additional federal funds, he noted.
Action plan: Legislators would have to pass a bill to expand the state Transportation Infrastructure Bank’s scope.
Possible effect on your life: A cash infusion from government loans for new infrastructure could result in new construction, engineering and tech jobs. Over time, the new roads, Internet access and schools would be expected to draw economic investments and grow jobs exponentially. Taxpayers would also be responsible for paying back the loans.
College of Charleston economist Frank Hefner:
One idea to the complex question is to eliminate some $3 billion in sales tax exemptions that have been put in place piecemeal since 1951 and lower the state’s sales tax to 2 percent, Hefner said.
Exemptions are government’s way of playing favorites, he said. For example, of the state’s more than 100 products free from sales tax are water, vacation timeshare plans, zoo animals and hearing aids.
South Carolina could also put a flat tax in place. Or the state could eliminate corporate income taxes as a way to lure businesses.
Hefner said he’s not endorsing a plan; picking the solution is why politicians are elected.
“It’s hard to look at one tax and say, ‘This will solve our problem,’ ” he said.
Action plan: Changes to the way the state taxes people and businesses need to go through the Legislature with the governor’s blessing.
Possible effect on your life: Eliminating the sales tax exemptions could leave you paying more for items, such as notebooks and clothes during back to school shopping.
Dana Beach, director of the Charleston-based Coastal Conservation League:
South Carolina needs an agricultural renaissance and a realistic evaluation, Beach said. The economy leading up to the recession was highly inflated, driven by massive speculation and built on Ponzi-style investments, he said.
“We need a new economy,” Beach said. His plan: Grow crops on South Carolina farmland, develop brands and market the products, sell local food in South Carolina grocery stores and consume the crops locally; capitalize on the local food movement. As it is now, less than 10 percent of what South Carolinians eat is grown in the state, he said.
The agricultural renaissance would build on the Certified S.C. Grown initiative by the state Department of Agriculture, Beach said. It would put rural South Carolina back to work. The food would need to be grown, harvested, packaged and transported, Beach said. The initiative could also be a boon to the state’s agri-tourism.
Action plan: Set a goal that by 2015, South Carolinians will double the percentage of state-grown food they consume and increase collaboration between the state departments of Agriculture and Commerce. Also, direct state-run institutions like public schools, universities, state offices and prisons to purchase a minimum percentage of their food from South Carolina farms.
Possible effect on your life: Beach said quality of life would improve by preserving open vistas and making South Carolinians healthier over the long term.
The economic news in recent years hasn't been all gloomy for South Carolina. Here are some highlights:
The Boeing Co. announced in October 2009 that North Charleston would be home to its second Dreamliner assembly line, marking the largest single economic development project in state history.
More than 15,000 new jobs announced since January, including the expansion and creation of giants in the tire manufacturing world, Michelin North America expansion, Continental Tire and Bridgestone Americas. Bridgestone's September announcement marks the single largest initial capital investment in the state with 850 new jobs and a $1.2 billion investment.
Clemson University Restoration Institute's wind turbine testing facility on the former Navy base, an investment state leaders say could lead to tremendous economic gain.
The economic downturn has taken a toll on our state. Here is a look at how:
Double-digit unemployment since February 2009, except two slight dips below 10 percent twice this spring.
Nearly 23,000 South Carolina homes are in foreclosure now or have been repossessed by banks, a number that does not include all of the homes that were repossessed and resold by the banks since the crisis began.
The economic situation drained state coffers by more than $2 billion over recent years, resulting in budget cuts for most every government program. The budget was bolstered temporarily by federal stimulus dollars that ran out this year. Tax collections are slowly ticking back upward, leading lawmakers to restore some of the cuts.