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ISSUE 10.43
Oct. 28, 2011

RECENT ISSUES:
12/04 | 11/27 | 11/20 | 11/13

Index

News :
Open laptops to close schools?
Legislative Agenda :
Judiciary and Finance on tap
Radar Screen :
Big budget board meeting Thursday
Palmetto Politics :
Recovery … yes?!
Commentary :
Focus on real problems and stop messing around
Spotlight :
Maybank Industries
My Turn :
Sales tax exemptions indicate “whimsical treatment”
Feedback :
Shortfall wasn't new news, spokesman says
Scorecard :
Economy to Mitchell to Haley and more
Stegelin :
Fright night
Number of the Week :
$1.1 billion
Megaphone :
Conspiracy Theory 101
Encyclopedia :
Indian mounds reveal part of state's prehistoric past
In our other publications :
Learn more about Charleston, SC

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NUMBER OF THE WEEK

$1.1 billion

That’s how much in profits Boeing earned during the most recent three-month quarter, which ended in September. Good news for a state with its latest plant expansion. Bad news for the rest of the world, since a large portion of those profits come from defense contracts. More.

MEGAPHONE

Conspiracy Theory 101

"Your unions are funding that … That is their way to distract you. That is their way to distract the American people and make them think the corporations are the bad guys.”

-- Gov. Nikki Haley, telling an aerospace industry trade conference who was really to blame for the Occupy movement. More.

ENCYCLOPEDIA

Indian mounds reveal part of state's prehistoric past

Dotting South Carolina's streams and rivers are Indian mounds, vestiges of her prehistoric past. These mounds offer fragmentary evidence of the cultures that thrived before the Europeans arrived. Five of South Carolina's Indian mounds are listed in the National Register of Historic Places: Adamson Mounds (Kershaw County), Blair Mound (Fairfield County), Lawton Mounds (Allendale County), McCollum Mound (Chester County), and Santee Mound (Clarendon County).

At least 16 Woodland mounds and 19 Mississippian mounds have been identified in South Carolina that are at least 50 percent intact. Another 1 known sites have been destroyed or are underwater. Woodland period mounds are located primarily along coastal rivers, while Mississippian mounds are found along inland rivers near the fall line. Beaufort County has the largest concentration of mounds, followed by counties located in the Midlands. Similar mounds are found in Georgia and North Carolina.


Santee Mound in Clarendon County

In the late prehistoric period and early contact period, some of South Carolina's mound builders were part of vast Mississippian chiefdoms. South Appalachian Mississippian ceramics indicate that a similar culture embraced South Carolina, Georgia, and neighboring areas. These mounds were ceremonial, cultural, or administrative in nature and at times were associated with villages and burials. Some of them were also associated with the Pee Dee, Lamar, or Irene culture.

Historical evidence suggests that as many as 150 mounds were present in South Carolina at the time of European contact. In 1540 Hernando de Soto encountered the mound dwellers of Cofitachiqui on the Wateree River. The accounts of his journey are important documentary sources for understanding the mound dwellers. During the Revolutionary War, the British recognized the strategic potential of the mounds. They built Fort Watson on the Santee Mound, which patriot forces captured in 1780. Erosion and looting threaten the survival of South Carolina's Indian mounds.

-- Excerpted from the entry by Alexia Jones Helsley. To read more about this or 2,000 other entries about South Carolina, check out The South Carolina Encyclopedia by USC Press. (Information used by permission.)

IN OUR OTHER PUBLICATIONS

Learn more about Charleston, SC

If you want to read some good news and views involving Charleston, take a look at CharlestonCurrents.com, our sister publication.  In the most recent issue, you'll find information about Charleston's cruise terminal controversy, a great list for young ghouls and goblins, a coming talk by a futurist and how SCRA is helping to make medical advances.  Subscribe for free.

If you want to get the latest daily news about South Carolina, consider SCClips.com.

PALMETTO PRIORITIES

Palmetto Priorities Statehouse Report encourages state leaders to develop and implement Palmetto Priorities involving several issues to make the state better a better place. Click the link to learn more about our suggestions for bipartisan policy objectives.

Here is a summary of our Palmetto Priorities:

CORRECTIONS: Reduce the prison population by 25 percent by 2020.

EDUCATION: Cut the state's dropout rate in half by 2020.

ELECTIONS: Increase voter registration to 75 percent by 2015.

ENVIRONMENT: Adopt a state energy policy that requires energy producers to generate 20 percent of energy from renewable sources by 2020.

ETHICS: Overhaul state ethics laws.

HEALTH CARE: Ensure affordable and accessible health care.

JOBS: Develop a Cabinet-level post to add, retain 10,000 small business jobs per year.

POLITICS: Have a vigorous two- or multi-party political system of governance.

ROADS: Strengthen all bridges and upgrade state roads by 2015.

SAFETY: Cut the state's violent crime rate by one-third by 2016.

TAX REFORM: Remove outdated special interest sales tax exemptions as part of an overall reform of the state's tax structure to be completed by 2014.

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News

Open laptops to close schools?

Future of online education coming faster and faster

By Bill Davis, senior editor

OCT. 28, 2011 -- Somebody better quick come up with an “app” for public school education in South Carolina because of the support for and the growth of online education across the state.

Four years ago, no one took classes online, according to Jay W. Ragley, spokesman for the state Department of Education. Now, Ragley estimates, there are close to 6,000 students across the state learning via broadband offerings.

According to one count, there are close to 700 students in Greenville County alone taking classes online, though it’s not known if they are doing all their class-work this way or just augmenting their education.

Ragley’s boss, state Superintendent of Education Mick Zais, has been a staunch supporter of online classes, championing the idea as another option to deliver education to families across the state.

In theory, it makes sense, as there are, for example, only so many hotshot advanced chemistry teachers across the state. It doesn’t make fiscal sense for a rural county with low student counts to pony-up big money to teach perhaps a handful of kids interested in what lies beyond peptide bonds, according to supporters and critics.

Linking those students with those teachers over the Net can save taxpayer money by the bucketful, according to observers.

Zais’s efforts have picked up more supporters of late, the most recent to come out being the Internet Innovation Alliance (IIA), which is looking to a further expand online education possibilities.

Part of that expansion has been fueled by major investments into the state’s Internet infrastructure, like AT&T, which poured $125 million into improvements over the past year.

“It’s pretty clear that this can be a more efficient use of resources,” said Ragley. “Taxpayer money for buildings, transport, food service won’t be needed to be provided in the virtual environment.”

Ragley added there would be big cost savings for districts and the state in teacher salaries.

But maybe not so fast yet

Several key education groups in the state approve of online classes, or distance learning, again, in theory.

“We are definitely not opposed to distance learning, or Internet schools, but we see it as only an additional tool and means for giving kids a quality education,” said Roger Smith, head of the South Carolina Education Association. “The key word being ‘quality.’”

Smith’s organization recently labeled Zais as a “deadbeat dad” for, in its view, not fighting hard enough for federal public education dollars that would benefit the children of the state.

“Distance learning is suitable for some students, however, it is not a panacea,” said Smith, who worried that Zais would divert money from existing brick-and-mortar schools to fund online options.

Smith said there was no substitute for having a teacher in the classroom, where eye-to-eye contact between teacher and student can be crucial to real learning.

Debbie Elmore, spokesperson for the S.C. School Boards’ Association, followed suit. While she thought distance learning was great for students catching up or picking up an additional course over the summer, she said “the jury is still out” on the quality of education gained totally online.

Elmore worried Zais would move to shift money from existing schools to the online option, saying that because there were limited funds in state coffers, the most cost-effective way to assuredly reach the largest majority of students is through existing schools.

Ragley said Elmore was being disingenuous in her belief there were no more places to cut in public education.

Crystal ball: Ragley’s last comment is telling. It may foreshadow how the GOP may try to sneak in more cuts to public education and provide an increased interest and support for distance learning in the cash-strapped legislature. The IIA released numbers this week that said a family could save as much as $8,000 a year using online services, from transportation savings and more. With an election year coming up and only a slight uptick in tax collections as the state economy recovers, plugging more money into online education may be low-hanging fruit. But remember, education isn’t necessarily an efficient process. It comes in fits and starts as students wrap their minds around ideas they didn’t want to consider. Remember algebra?

Bill Davis is editor of Statehouse Report.  He can be reached at:  bill@statehousereport.com.

RECENT NEWS
Legislative Agenda

Judiciary and Finance on tap

  • Finance. A Senate subcommittee will meet with DHHS head Tony Keck and DSS head Lillian Koler at 10 a.m. Wednesday in 308 Gressette for an update meeting how the two agencies are handling Medicaid/Medicare changes. More.

  • Judiciary. The joint Sentencing Reform Oversight Committee will meet Thursday at 1 p.m. in 207 Gressette to discuss drug courts. More.

Radar Screen

Big budget board meeting Thursday

Two big items loom on the agenda for the next meeting of the Budget and Control Board at 10 a.m. Thursday in room 252 of the Brown building at the Statehouse complex. 

First is the state Department of Transportation’s formal unveiling of its ongoing fiscal problems, which include expedited federal compensation and a potential $29 billion shortfall over the next two decades.  

Many in Columbia had been quietly pooh-poohing the recent $29 billion revelation, saying it was just political theater to drown out a potential uproar over the agency falling behind yet again on paying off its contractors. But the worm appears to be turning and concerns are reportedly rising that there are big problems afoot at the agency, just a few years after a legislative housecleaning of the agency

The second big item will be the fight over the state’s retirement system. A couple of the same old issues will be fought over again, namely the expected rate of return on the pension fund’s investments and the number of years of service needed before an employee becomes fully vested. These are minutiae compared to what’s really at stake: potentially taking another step down the path toward a defined benefits plan, through which employees get what they put in and drive their own investing.

Palmetto Politics

Recovery … yes?!

Looks like the state economy is officially on the mend. For the second quarter in a row, the state is taking in more in tax collections than had been previously projected. This latest quarter, sales tax collections exceeded projections by nearly $14 million, income tax collections by $59 million and corporate taxes by $6.7 million. The Board of Economic Advisors this week projected slow and steady growth in the coming year, which is a marked change from the way the state had been skittering along the bottom for the past two years.

Commentary

Focus on real problems and stop messing around

By Andy Brack, editor and publisher

OCT. 28, 2011 -- There’s such a distrust of government among Americans at the national level that South Carolina’s leaders need to take steps to reinvigorate confidence of voters or face their wrath at the polls next year.

According to a new poll by The New York Times and CBS, only 9 percent of Americans approve of the way Congress is handling its job -- a far cry from around 70 percent after the September 11 tragedy. The disenchantment shows up in how people think President Obama is doing too -- some 46 percent approve of how he’s handling things and 46 percent don’t.

Other results: More than two thirds of Americans think Congressional Republicans favor the rich and four in 10 say they generally agree with the Occupy Wall Street movement.

In other words, the chasms in America are growing deeper. Rather than fueling partisanship that will make divides even bigger, America’s leaders need to be leaders, not puppets for special interests. Their only interest should be that America should become stronger with more to offer people.

But as distrust grows as fear about the future of the economy grows, South Carolina leaders can take some proactive steps to steer the state away from craziness and toward strength:

  • Stop the issues shell game. Instead of focusing on hot-button issues guaranteed to inflame voters -- abortion, gun laws, gay marriage, limiting voting options, immigration -- start working on real issues to make South Carolina better. Work to make real changes to improve education, create jobs and fix the state’s health care system.

  • Stop the blame game. Instead of pointing fingers to gain temporary favor and score points for the moment, look to the long term for real solutions. For example, Gov. Nikki Haley this week told an audience that she thought unions were behind the “occupy” movement. So what? Instead of interjecting partisan thoughts about that, it might be a little smarter to keep a focus on South Carolina and its challenges.

  • Fix the state’s tax code. It’s as clear as the nose on anybody’s face that South Carolina’s antiquated tax code is unfair and a huge mess. Special interests get billions of dollars of sales tax exemptions. The income tax structure is anything but a progressive balance to the regressive nature of the sales tax. The state’s approach to property taxes has thrown most local governments and commercial businesses for such a loop that it needs to be reformed, not patched. But the folks at the Statehouse likely will do the same dance in 2012, an election year, that they’ve done year after year. They’ll talk a little about making changes. They’ll coo, steam, interject and banter. Unless voters hold their feet to the fire, little will be actually done.

  • Develop a long-term plan. The state seems to be on a continuing path of responding to one crisis after another. State lawmakers don’t seem to have much of a proactive, long-term plan for guiding the state toward a goal. Without an end-game in mind, how can they be expected to craft serious policy proposals to vote on so that the state can achieve its goals? Across America, local governments work to envision plans for how they want their communities to be in 30 or 40 years. Why can’t state government do the same thing as a whole, instead of individual silos of government scrambling to make their silo a little bigger or broader without relation to how the whole of government works?

More than anything, people are frustrated with government because they see the people they elected -- at the Statehouse or in Congress -- as continuing to play the same games. For the state and nation to get better and turn a corner away from our economic miasma, politicians need to stop screwing around. Otherwise, they might find themselves out of a job, just as millions of Americans now are.

Andy Brack is publisher of Statehouse Report.  He can be reached at: brack@statehousereport.com

Spotlight

Maybank Industries

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My Turn

Sales tax exemptions indicate “whimsical treatment”

By Chip Brown
Special to Statehouse Report

OCT. 28, 2011 -- The S.C. Supreme Court will hear oral arguments after Thanksgiving in a case challenging the constitutionality of the state’s 78 sales tax exemptions. The issues raised in Bodman v. State of South Carolina are not new, and if the General Assembly were attentive to the inequities in the sales tax, there would be no need for a judicial decision.  Thus, objections to -- and criticisms of -- this suit by legislators is not to be taken seriously because the General Assembly could have acted to preclude this suit.

The Taxation Realignment Commission report, issued last year at legislators’ direction, provides a well-researched and spot-on basis for dealing in a comprehensive fashion with those inequities, as well as the other problems characterizing the state’s structure of public finance. But the Legislature continues to abdicate its responsibilities with respect to this critical issue.

From the plaintiff’s perspective, the problems with the sale tax laws are not simply policy differences, but fundamental constitutional issues that must be addressed. The first time this issue came before the court, in Ed Robinson Laundry and Dry Cleaning v. S.C. Department of Revenue in 2003, it ruled 3-2 that such exemptions (then 61 in number) were constitutional. The majority said that the disparate treatment manifest in the tax exemption scheme didn’t violate the equal protection clause because the state had demonstrated a “rational basis” for them. (It is, as legal tests go, a fairly easy test to meet, and a little creative lawyering can get you there.)

The majority acknowledged that “Robinson may be correct in noting such exemptions (indicate) a misunderstanding of economics and are therefore unwise in an economic sense.” It did not find, however, that such economic inequities were unconstitutional. This conclusion once again demonstrates that good law (i.e., that which is deemed constitutional) is not necessarily good public policy. Indeed, it may be the very antithesis of good public policy. Certainly the fact that the sales tax law passed constitutional muster doesn’t indicate that it rests on a fundamentally sound basis.

 "Good law is not necessarily good public policy."
The court was by no means united — or particularly convincing in finding the law constitutional. The far more accurate description of the nature of the state’s range of sales tax exemptions came in the dissent from Chief Justice Jean Toal.


Justice Toal opined not only that was there no rational basis for treating Robinson’s business differently from other services, but also that there was “a genuine issue of material fact … as to whether the sixty-one exceptions to the sales tax law are arbitrary and capricious and thus violate the Equal Protection Clause.”

The fact that there are now 78 exemptions would, I think, enhance her argument. The absence of a legal pronouncement in Robinson that the sales tax exemptions are “arbitrary and capricious” is not the same thing as saying they are not arbitrary and capricious as a matter of policy. (The TRAC study alone demonstrates that.) It simply meant that there is no judicial remedy for such flaws, only a legislative one. If the opinion of Chief Justice Toal in the Robinson case holds sway in Bodman, that arbitrariness and capriciousness will be acknowledged as a matter of law. And a remedy will have to be crafted by the legislature.

How exceptions and exemptions in tax codes evolve in the political and legislative process — typically one special-interest concern after another acceded to over time, with little consideration of the relationship of each to the whole — is practically evidence in itself of the sales tax law’s arbitrariness. Everyone wants to carve out a safe haven, much as the automobile dealers did in securing a cap on their sales tax during the debate over the 1-cent increase in the sales tax in the Education Improvement Act. There was clearly a political basis for that concession, but I would hardly call it rational from a policy perspective. The same can be said about many of the other exemptions as well.

Even if the law began with a rationally and well-thought-out basis, when the changes over time are considered as a whole and measured against what a well-written law would look like, they indicate, in the chief justice’s words, “whimsical treatment of various entities for tax purposes.”

Chip Brown is a Teaching Associate at Coastal Carolina University and Horry-Georgetown Technical College.  He may be reached at ebrownjr@sc.rr.com.
Feedback

Shortfall wasn't new news, spokesman says

To Statehouse Report:

This news ["The era of shortfalls?", 10/21/11] is not new, nor was it “revealed.” For ten years, the SCDOT leadership’s mantra has been “20 years & $20 billion.”

That refers to the time and cost of bringing the entire 41,000 mile system with its 8300 bridges up to the “Good” status. Now the cost is $29 billion.

SCDOT has been using the 20 year/$20 billion message for a long time. No one wanted to listen.

-- Pete Poore, director of communications, SCDOT, Columbia, SC

Statehouse Report replies:  It certainly was news to us as it was to many.  People are paying attention now.

Want to vent a little?   Send us a letter.  Letters are published weekly. We reserve the right to edit for length and clarity. We generally publish all comments about South Carolina politics or policy issues, unless they are libelous or unnecessarily inflammatory. One submission is allowed per month. Submission of a comment grants permission to us to reprint. Comments are limited to 250 words or less.
Scorecard

Economy to Mitchell to Haley and more

Economy. State tax collections once again exceeded projections for the second quarter in a row, showing a rebounding state economy. More.

Nukes. The federal Energy Department is considering a plan to ship SOME of the plutonium stored at the Savannah River site to a site in New Mexico. SOME. More.

College. While still relatively pricey, South Carolina’s public colleges and universities didn’t increase tuition as much as other states. More.

Tax charges.  A magistrate found probable cause to send tax evasion charges against State Rep. Harold Mitchell (D-Spartanburg) to trial, but Mitchell said state prosecutors had to admit in court that the state has cashed checks from him that its revenue department says it never received. More.

Unemployment. South Carolina’s jobless rate dropped a tad, halting a four-month increase, which is great. But at 11 percent it is too dang high. More.

Haley. Sucking up to an aerospace trade conference (read: Boeing) by blaming unions for the Occupy movement? Now, THAT’S transparent. What’s next, everyone on SRS is on drugs? More.

Omission. Ads for the state’s new voter I.D. law omitted that absentee voters don’t need to show identification. The law is currently under scrutiny by the federal Justice Department because of the state’s past voting rights transgressions. What a perfectly crafted law! More.

Stegelin

Fright night


Also from Stegelin: 10/2110/14 | 10/7 | 9/30
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Editor and Publisher: Andy Brack
Senior Editor: Bill Davis
Contributing Photographer: Michael Kaynard

Phone: 843.670.3996

© 2002 - 2018 , Statehouse Report LLC. Statehouse Report is published every Friday by Statehouse Report LLC, PO Box 22261, Charleston, SC 29413.
Excerpts from The South Carolina Encyclopedia are published with permission and copyrighted 2006 by the Humanities Council SC. Excerpts were edited by Walter Edgar and published by the University of South Carolina Press. Statehouse Report has partnered with USC Press to provide readers with this interesting weekly historical excerpt about the state. Republication is not allowed. For additional information about Statehouse Report, including information on underwriting, go to http://www.statehousereport.com/.