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ISSUE 10.51
Dec. 23, 2011

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

Index

News :
Flipping the pages to a new year
Legislative Agenda :
Holiday break
Palmetto Politics :
That pesky U.S. Constitution
Commentary :
It feels like things are getting better
Spotlight :
S.C. Chamber of Commerce
My Turn :
Bah! Humbug!
Scorecard :
Coal plants, injunction, Jasper port
Stegelin :
Happy Holidays!
Megaphone :
Laugh it off?
Encyclopedia :
South Carolina's railroads

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EDITOR'S NOTE

Be safe this holiday season

With the holidays upon us, let us wish hearty Season's Greetings to all of our readers. With next week's issue, we will finish our 10th year of publication.
 
In the Dec. 30 issue, be on the lookout for a Statehouse Report first -- a video of cartoonist Steve Stegelin's best cartoons of 2011.   Merry Christmas.  Happy Hanukkah.  Happy New Year to all!

NUMBER OF THE WEEK

9.9 percent

South Carolina’s unemployment rate for the month of November dropped under 10 percent for the first time since April, and mirrored a national drop, too. The drop was aided by seasonal hires by retailers responding to improved economic forecasts, according to media reports. More.

MEGAPHONE

Laugh it off?

“This is a joke."

-- Rob Godfrey, spokesman for Gov. Nikki Haley, responding to U.S. Sen. Tom Harkin (D-Iowa) calling for a federal investigation into possible misuse of federal funds by the state. Harkin was incensed the federal government gave South Carolina a $1 million grant to prepare for federal health care reform, while Haley allegedly used the money to fund a study committee to look into ways of getting out of federal health care programs. More.

ENCYCLOPEDIA

South Carolina's railroads

Although South Carolina never developed a railroad network comparable to those in most northern states, it nevertheless gained recognition as a railroad pioneer in the United States. Chartered in 1827, the South Carolina Canal and Rail Road Company (SCC&RR) ran its first train on Christmas Day in 1830, the initial railroad line in the South. When its 136-mile line between Charleston and Hamburg was completed in 1833, it was the longest continuous railroad line under single management in the world.


The "Best Friend of Charleston" (1830) is widely acclaimed to be the first steam locomotive built in the U.S.

Although not an immediate success, the SCC&RR (later reorganized as the South Carolina Railroad) touched off a railroad mania in antebellum South Carolina. Several new railroads were chartered by the General Assembly, including the ambitious Louisville, Cincinnati, and Charleston Railroad, but a chronic lack of investment capital and a generally stagnant economy dampened most railroad efforts in South Carolina throughout most of the 1830s and 1840s.

To stimulate additional railroad development, in 1847 the General Assembly established a revolving fund to provide state aid to railroad construction. This aid, coupled with a revived economy, created a railroad boom in South Carolina in the 1850s, with railroad mileage increasing during the decade from 289 to 973, representing a capital investment of more than $22 million in public and private funds.

By 1860 there were eleven railroads operating in the state, including two major arteries: the Charlotte and South Carolina Railroad, which connected Columbia with Charlotte, North Carolina; and the Greenville and Columbia Railroad. Railroads, and the accompanying economic boom of the 1850s, helped transform the state's upcountry. Existing towns along the railroads grew, and new towns, such as Rock Hill and Belton, came into existence. With a vastly improved transportation system, commerce and cotton production in the upstate soared.

The Civil War seriously damaged railroads. Hundreds of miles of track were worn out or destroyed by Union forces, as were engines and rolling stock. New construction all but ceased during the war. Antebellum railroad companies emerged from the war deeply in debt, with most either failing or consolidating in the ensuing years. Reconstruction-era legislatures eagerly used the credit of the state to put South Carolina's railroads back in order, which also created a series of postwar scandals involving railroad managers and corrupt legislators who bilked the state treasury of millions of dollars. Nevertheless, by 1877 more than 350 miles of new track had been added to prewar totals.

(To be continued ...)

-- Excerpted from the entry by H. Roger Grant. 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.)

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

Flipping the pages to a new year

What will drive legislators in 2012?

By Bill Davis, senior editor

DEC. 23, 2011 -- Revamping the state’s underfunded retirement system will be the number one legislative priority when the General Assembly reconvenes in early January, several key legislators predict.

Or will it?

State representatives and senators from both political parties say they agree that solving an unfunded pension mandate that may be as large as $17 billion is the single biggest issue hanging over the Statehouse in 2012. And both sides of the aisle in both chambers agree that something has to be done. But what that solution could be varies depending on who is talking.

State Sen. Greg Ryberg (R-Aiken), champion of limited government, said the state did it to itself when legislators in the recent past dropped the number of years needed to be fully vested in the system -- which includes state and some municipal workers, legislators, county school teachers and the state judiciary.

He said dropping the eligibility requirement from 30 years to 28 years of service was fine, but the legislature declined to appropriate additional funding to cover the actuarial difference. Additionally, Ryberg said the 2007 decision to include an automatic cost of living increase for some recipients was equally problematic for the same reason – no additional funding identified for the increase in payouts.

Ryberg, a critic when it passed, still thinks increasing the pension fund’s expected return on investment from 7.25 percent to 8 percent is just asking for more trouble, especially considering the problems on Wall Street.

“We need to get back to when the retirement system was just that, a retirement system,” said Ryberg, who pointed out there are current state pensioners who started drawing benefits in their mid-40s. House Majority Leader Kenny Bingham (R-Cayce), pointed out that workers could draw retirement benefits from the state for longer than they ever paid into, especially as lifespans have increased over the past 50 years.

But when employees can access their hard-earned retirement checks is a sticky matter for House Minority Leader Harry Ott. (D-St. Matthews). A farmer by trade, Ott doesn’t want there to be a 10-year gap before teachers can start tapping into their benefits. A teacher that starts at a school at age 22 and fully vests after 30 years of service can, Ott said, retire at 52. 

“But, some people want to make them wait until their 62 before they can draw retirement – what are they supposed to do for those 10 years?” asked Ott.

With Gov. Nikki Haley putting reforming the retirement system on her short-list of legislative priorities, there will be lots of fire. And you know the old saying, where there’s fire … there’s smoke.

Diversionary tactic?

In 2008, illegal immigration reform was pitched as the number one topic in the Statehouse. It garnered the most ink and electronic coverage. And the resulting bill had to be revamped, and followed up by an even more contentious bill last year.

All the while, the bigger issues of a spiraling state budget and the increase of cigarette taxes slid by for a while.

Will 2012 fall into the same paradigm? Consider the other big issues.

Tax collections. Legislators will have a $900 million question, as in what to do with the huge additional amount the state Board of Economic Advisers has now projected will be present in tax collections for next year’s budget. Haley has always called for taxpayer rebates, but will she be more inclined to refill rainy-day funds and pay down state debt with the windfall?

House Ways and Means Chairman Brian White (R-Anderson) hopes his colleagues will understand that more than half that amount is non-recurring dollars and not earmark them for continuing programs and projects. White said he would like to see the extra money parsed out to pay down state debts, such as the one incurred by the unemployment agency’s fiscal implosion, or even putting some of toward retirees’ health care insurance plan.

Health care. Despite all the machinations about avoiding federal health care reform and calls for smaller government, White said he has heard that Medicaid will ask for nearly $350 million in new dollars when budget session begin in earnest next year.

Caucus agenda. Then there’s the return of the agenda by the House GOP Caucus. Legislators aren’t, according to Bingham, rehash it. House members are waiting for the Senate to deal with their two-year agenda, which the Caucus passed in a single session in 2011. That agenda includes transparency votes, shortening the session, providing for more pro-life protection, limiting government and tax reform.

Restructuring. Add to that Haley’s lingering restructuring and creation of a Department of Administration – which voices say may happen, but not resulting in a spot in her cabinet.

Other issues. Also on legislators’ plates: Reform of the state Department of Transportation and education. But some say the legislature won’t give Haley more power over the DOT because of their strained relationship and her performance since the session ended. And K-12 education, the second largest part of the state budget, may face formula adjustments to help steer more money to poor counties.  

Crystal ball: The silent assassin in next year’s agenda will be, of course, the election. Republicans will have a hard time shrinking or growing government knowing tea party eyes are watching. And remember, despite calls for drastic overhaul of the retirement system, the legislature is a deliberative body. And for deliberative, think “slow.” As such, incremental changes may be on the menu for the retirement system, which could become the next immigration-like issue in which legislators make a lot of noise about solving it, but keep coming back year after year to “fix” it.

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

RECENT NEWS
Legislative Agenda

Holiday break

As of today, there are no major legislative meetings scheduled until the second week of January, when the legislative session reconvenes.

Palmetto Politics

That pesky U.S. Constitution

A federal judge this week struck down a contentious portion of the state’s latest immigration law, that directs law enforcement to ascertain the immigration status of any person they believe may be in the country illegally. The judge’s actions mirrors past rulings on a similarly controversial bill penned by the Arizona legislature. The fate of both bills will be on the line next year in federal court. Both states have argued that federal preemption of immigration law is not applicable, as the federal government has “failed” in enforcing its own immigration policies.

Victoria Middleton, executive director of the state chapter of the ACLU, welcomed the ruling. “The court’s ruling means this draconian law will not immediately threaten the safety of innocent people, including victims of domestic violence and human trafficking and even asylum seekers,” said Middleton. “We hope the ruling means families will not be separated and South Carolina will not be turned into a police state.” The ruling also means that, for now, immigrants would not be required to carry with them papers showing their immigration status, and that those harboring illegal aliens won’t face felony charges.

Haley’s email problem

HaleyIt’s probably a good thing that Gov. Nikki Haley announced this week a new records-keeping policy would be in place for her administration by January. But the downside was that it wasn’t part of her “transparency” campaign plank. The new policy is an obvious spin for getting busted for not releasing an email showing her meddling with a supposedly independent, federally-funded study committee looking into whether the state should join or avoid federal health care reform programs.

Criticism for her taking $1 million in federal money for the study group, and then potentially skewing the results, has spread as far as Congress, where a ranking Democratic U.S. Sen. Tom Harkin of Iowa has called for an investigation into whether Haley misused the funds. Some have Haley should return the federal grant, which was supposed to help states prepare to take part in federal health care reform.

Commentary

It feels like things are getting better

By Andy Brack, editor and publisher

DEC. 23, 2011 -- Did you hear a big whoosh this week across South Carolina? It was a collective and huge sigh of relief that the state’s unemployment rate is in the single digits again.

Even though South Carolina still has one of the highest jobless rates in the country, there’s just something about crossing into single digits that makes the future feel brighter.

And that’s news we all can use at the holidays and as we consider what’s next in 2012.

Sure, the 0.6 percent drop -- the largest monthly decrease for the state since 1976 -- could cross back over the line in the next couple of months when the holidays pass and seasonal workers are back at home. But the jobless rate has dropped four months in a row since August’s 11.1 percent, which was the year’s high.

What adds a little icing to the cake is that unemployment is down across the country in all but seven states. Perhaps that signals how the nation really is rebounding following the so-called end of the recession a year or so ago. Much to the dismay of many who don’t like President Obama, it also may signal that some of his economic policies to get the country more on the move are starting to work, just as some longer-term strategies by state officials seem to be bearing fruit.

Economist Harry Miley of Columbia warns the state isn’t out of the woods, but agrees things are looking up.

“The number of unemployed is still 92,000 above what it was in November 2007 and employment is still 55,600 [jobs] below its November 2007 level,” he said. But employment also has increased in seven of the last 11 months and is almost 25,000 jobs above what it was a year ago. Similarly, the number of unemployed people is 22,000 below what it was in November 2010.

Also interesting: South Carolina’s new single-digit unemployment rate status doesn’t reflect the 17,000-plus jobs that Haley Administration officials have recruited and announced since January.

“It’s true that [announced] jobs do not always turn into on-the-ground paying jobs overnight,” said the S.C. Department of Commerce’s Amy Love. “Companies recruited to locate or expand in South Carolina create those jobs as new plants or expansions are completed. For larger projects, it may take years and several phases to ramp up to full employment. Projects located into existing buildings may come on line faster.”

That’s all good news because it means more good-paying manufacturing jobs will become part of the employment numbers in the month ahead and should cause the unemployment rate to continue to drop more.

Frank Knapp, president of the S.C. Small Business Chamber of Commerce, said small businesses across the state are starting to see signs of life and see the economy moving in the right direction.

“To the degree they can get access to capital and money, they are creating jobs, whether that be small retail or small manufacturing,” he said.

Maybe it’s time for the state’s leaders to make a more serious effort of helping South Carolina’s small businesses, which seem to get a lot of attention at election time for being the “backbone of the state’s economy.” The rest of the time? The state obsesses about big companies. 

Knapp suggested state legislators might want to consider creating a special small business fund set up like an infrastructure bank that would guarantee a minority percentage of the risk of loans covered by the U.S. Small Business Administration. Even though the SBA might cover 90 percent of a bank’s risk on a loan, banks -- still timid with all of the new financial requirements imposed after the Wall Street meltdown -- often are reluctant to take on risk of even 10 percent, Knapp said. A state-backed guarantee of just 5 percent of SBA-approved loans with strong business plans could tip the balance so the loan would go through -- and a small business could make investments that would create more jobs.

Regardless, one thing is for sure -- our economic news is looking up, just as our spirits are brighter as we celebrate the holidays.

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

Spotlight

S.C. Chamber of Commerce

The public spiritedness of our underwriters allows us to bring Statehouse Report to you at no cost. This week's spotlighted underwriter is the South Carolina Chamber of Commerce. As the premier advocacy organization in the state, the South Carolina Chamber of Commerce will serve as the unified business voice for promoting an economy of increased productivity and per capita income to achieve global competitiveness. Our work includes efforts to decrease business costs and increase productivity; build a highly-skilled, capable workforce; nurture entrepreneurial development; foster a favorable climate among our members and their employees; and Improve quality of life for all South Carolinians. For more, go to: www.scchamber.net.

My Turn

Bah! Humbug!

Political process needs to change for better leaders


By Ashley Woodiwiss

Special to Statehouse Report

DEC. 23, 2011 -- Can the "ho-ho-ho." As we citizens come to the end of political year 2011, two words sum up our political mood: “Bah! Humbug!” Prospects don't appear much brighter as we look to next year and its elections.

Recently, I received an email from one of my students. On the night of December 10, this civically-minded student lamented, "I am sitting here watching the Republican debate and I am extremely frustrated. I am going to vote in the primaries and am wondering how I am going to bring myself to vote for any one of these candidates."

Unfortunately, I think this is a political sentiment with which far too many of us can resonate. As we look to 2012 and all that is at stake for our nation, we draw cold comfort as we consider the methods we use to identify, support and select leaders worthy of their office and capable of leading our nation out of the various troubles that beset it.

How did we get to this situation? I think in this student's complaint one can find several factors that have led to her (and our) frustration over how we do campaign politics at the national and state level.

One is with the current primary system used to select parties' nominees for major public office. Since the 1970s, we have shifted from a party-based method to a candidate-centered process with self-selected candidates competing in "playoff" primaries. Thus, unlike most party-centered democracies around the globe, voters in the U.S. select from a variety of self-selected candidates who "sell their goods" to voters. In other democratic societies, candidates are more narrowly tied to and selected by party leadership. So voters in those societies are actually not voting for individual candidates so much as voting for the political party and for what it stands.

The plus side for the way we do it here in the U.S. is, of course, that it allows for more individual freedom. Anybody (well, anybody with enough money, both personal and campaign) can run for national or major state public office and they will rise and fall on the basis of popular support for their positions. The downside is, well, that very freedom. No serious major party in any other democratic nation would put forth as a candidate for that nation's highest office a Bachmann, a Paul, a Cain, a …well, you get the idea.

Additionally, scheduling primary elections in the spring months ahead of the November general election and with voting taking place on a work and school day has led to low voter turnout with only the most committed (and thus most partisan) voters showing up. This means candidates vying for the support of primary voters must appeal (pander may be another term here) to a narrow partisan constituency. But these partisan primary voters do not represent the political views, attitudes, and values found in the broader public.

This leads to a dilemma in both parties which Cindi Ross Scoppe recently noted in an editorial in The State: "The [candidate] who appeals best to independent voters such as myself — and who therefore has the best hope of winning the general election — isn’t getting any traction with primary voters." By rewarding highly partisan, narrowly-focused voters such a dominant role in selecting the party's nominee for office, one might say, as was said in another context, "verily, they have their reward."

So, my student's frustration is well-placed. In fact, our democracy is not being well-served by those very processes we have put in place in the name of more democracy. Another time for potential remedies. (Another time also for considering how another source of frustration -- the current method of debates -- also sets back the public good.) 

For now, while there are real reasons to wish our neighbors a Merry Christmas, the state of our politics certainly isn't one of them. A truly Happy New Year for the public life of our country will require some serious efforts to change the way we do our political business. Call me Scrooge, but I expect another “Bah!  Humbug!” in 2012. 

Ashley Woodiwiss is the Grady Patterson Chair of Political Science at Erskine College in Due West, S.C.

Scorecard

Coal plants, injunction, Jasper port

Coal plants. Santee Cooper will likely close two coal-fired power plants in South Carolina because of federal laws limiting mercury pollution. More.

Injunction. A federal judge in Charleston struck down three key components of a controversial state immigration law that included allowing cops to detain suspected illegal immigrants, and requiring immigrants to carry “papers.” More.

Records. Oh, now Gov. Nikki Haley wants to create a policy where all the governor’s emails are recorded and made public? Is that part of the “transparency” plank she campaigned about? Or is it a result of getting caught red-handed for not releasing a damaging email in response to a Freedom of Information request? Transparent, indeed. More.

Occupy. Protesters can “stay” overnight on Statehouse grounds, they just can’t “camp.” More.

Health care. The federal Affordable Care Act has reportedly provided 30,000 young South Carolinians health care they normally might have not received, so far. The bad news is that the federal law still faces legal hurdles before full implementation and South Carolina’s governor is dead set against taking part. More.

Jasper port. The S.C. State Ports Authority board voted this week to suspend support for a Jasper County facility co-owned with Georgia until key issues are ironed out.  Take that, Savannah dredgemeisters! More.

Stegelin

Happy Holidays!


Also from Stegelin: 12/16 | 12/9 | 12/2 | 11/25
credits

Statehouse Report

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/.