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ISSUE 11.07
Feb. 17, 2012

RECENT ISSUES:
10/10 | 10/03 | 9/26 | 9/19

Index

News :
South Carolina’s nuclear future
Legislative Agenda :
Committees back at it
Radar Screen :
Time gobbler
Palmetto Politics :
Well, that was easy ... not
Commentary :
Time for Ard mess to come to a conclusion
Spotlight :
Maybank Industries
My Turn :
Local Government Fund key to providing essential city services
Feedback :
Unemployed, irritated at legislature’s disrespect
Scorecard :
From real estate to restructuring to transparency
Stegelin :
The perils of more secrecy
Number of the Week :
$6,000,000.00
Megaphone :
Restructuremefying
Tally Sheet :
Few bills introduced
Encyclopedia :
The resplendent ACE Basin

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NUMBER OF THE WEEK

$6,000,000.00

That’s how much in federal money could be spent on studying the deepening of Charleston Harbor in the coming two years, if President Obama’s budget is passed. Deepening could result in more shipping traffic that, while a potential environmental problem, could act as an accelerant to the state’s growing economy. More.

MEGAPHONE

Restructuremefying

“We’re about to bring a government structure built for the 19th century kicking and screaming into the 21st century.”

-- S.C. Sen. John Courson (R-Richland) on the Senate unanimously passing a bill to create a Department of Administration run by the governor but overseen by the legislature. More.

TALLY SHEET

Few bills introduced

With the House out of session this week, only senators introduced new bills. Of interest:

Arts funding. S. 1210 (Hayes) calls for a dedicated source of revenue for the S.C. Arts Commission, with several provisions.

No sleeping in your office. S. 1227 (Peeler) would prohibit campaign, sleeping or use of the Statehouse grounds and all buildings for living accommodations. The bill, a response to the Occupy Columbia movement, would also keep lawmakers from sleeping in their offices, a la Mark Sanford when he was a congressman.

Money laundering. S. 1230 (Rose) is the “Money Services and Illicit Finance Abatement Act” to allow the state to make money transmission regs, with several provisions.

Taxpayer Relief. S. 1233 (Malloy) calls for the “Taxpayer Relief Act” with procedures for civil actions for false claims and more.

ENCYCLOPEDIA

The resplendent ACE Basin

The ACE Basin consists of around 350,000 acres in the watershed of the Ashepoo, Combahee and Edisto Rivers in the South Carolina Lowcountry, which drains one-fifth of the state. The ACE Basin encompasses a range of ecosystem types from forested uplands to tidal marsh (salt, brackish and fresh water). The basin is home for more than 260 permanent and seasonal bird species and seventeen rare or endangered species, including the wood stork and the loggerhead turtle.

History, as much as geography, unites the three rivers. By the 1750s the rivers were lined with plantations dedicated to rice production and using African slaves for the arduous labor required. Most plantations controlled tidal flows by a series of floodgates (rice trunks), dikes, and canals to grow vast amounts of rice. The Civil War and emancipation, along with an increase in both foreign and domestic competition, led to the eventual collapse of rice culture. Through the twentieth century, the ACE Basin experienced almost no industrial development, which kept the landscape largely intact as forest and estuary.

In 1988 Ducks Unlimited, the Nature Conservancy, the U.S. Fish and Wildlife Service and the South Carolina Department of Natural Resources joined forces to create the ACE Basin Project to preserve the landscape and wildlife habitat. The combined federal, state and private conservation groups used purchases of public land, conservation easements and other methods to preserve 135,980 acres of land by 2000.

-- Excerpted from the entry by James H. Tuten. 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

South Carolina’s nuclear future

Over-building and disaster or the solution to growing power needs?

By Bill Davis, senior editor

FEB. 17, 2012 -- Thanks to the first federal permitting of two new nuclear reactors in a generation at an existing nuclear energy plant in Georgia, South Carolina’s nuclear future may accelerate to “next in the nation” status.

That has caused concern and celebration, respectively, for parties in the state’s environmental and energy-generating communities.

Mike Couick, president of the Electric Cooperatives of South Carolina, said similar designs between the Georgia plant and designs submitted for a two-reactor expansion at the Jenkinsville plant outside of Parr, S.C., “should give [us] an indication that we’re next.”

But environmental and conservation groups, still split on the specter of nuclear energy, worry the state may be on the cusp of huge sticker shock and of building generating capacity past domestic needs.

They argue that it is just bad policy to needlessly expose residents to possible environmental problems while selling the power generated to customers down line in other states.

Both sides, however, are in general agreement – with one significant detractor -- on the lessons of last year’s meltdown disaster in Japan and the need for incremental building of nuclear plants.

Couick, whose cooperative is funding just short of 30 percent of the multi-billion dollar project at Jenkinsville, said what was needed was to have regional cooperation among the energy-generating companies.

“What we don’t need is there to be a nuclear plant being built elsewhere in South Carolina [corrected] at the same time as a new reactor is going up in the Midlands,” said Couick.

Couick said such a scenario would not only exceed baseload energy needs, but it would double possible environmental problems. He stressed he didn’t think nuclear energy was per se dangerous.

A mixed bag

Green opposition to expansion at Jenkinsville remains a mixed bag.

Environmental heavyweights like the S.C. Coastal Conservation League and Conservation Voters of South Carolina include nuclear as an option for the state’s energy future, as they consider it a lesser evil to coal-powered electricity generation.

“We have to be realistic in this,” said SCCCL’s Hamilton Davis. “We have to work with the reality of the state’s energy needs” knowing there was no way to just “shut off coal.”

“We’re no cheerleader for nuclear power,” said Davis, adding that his league opposed the idea of constructing nuclear power plants to see “who wants the electricity.”

The Jenkinsville plan drew criticism last year when the possibility of selling some of its power to Jacksonville, Fla., became public knowledge.

Ann Timberlake, who heads the Conservation Voters, said she remained concerned by comments made last year by several lawmakers that nuclear, because of the ability to sell excess power to other states, was a “growth industry.”

Timberlake said her organization would entertain any replacement for coal. She also called for an emphasis on the “huge savings” afforded by relatively cheap efficiency and conservation before nuclear was to be considered the final option for getting rid of coal.

‘Socialized’ energy, or solution?

Susan Corbett, head of the state chapter of the Sierra Club, was less compromising. Corbett argued for the state bypassing new nuclear generation completely and getting to permanent solutions like wind and solar energy.

Corbett excoriated the nuclear option, saying it was a boondoggle that couldn’t stand on its own in the “free market” even after more than five decades, and had to be “propped up” by taxpayers’ wallets to make it anything close to a realistic option.

Couick said the new construction cost per-kilowatt hour of a coal plant is about $2,000 to $3,000 [corrected data], compared to close to $5,000 per kilowatt hour for nuclear. As a result, Corbett argued that nuclear, because of its prohibitive costs, was already a non-starter.

“Wall Street doesn’t want to invest in it, so they are turning to federally-guaranteed loan programs, where the companies can walk off if [the plants] don’t work out,” she said. “It’s ‘socialized’ energy.”

SCANA spokesman Eric Boomhower said his company, which has a large stake in the Jenkinsville project, has not "committed" to federal loan guarantee programs. He also said SCANA did not see those programs as "essential" to funding the Jenkinsville expansion. But, Boomhower added, SCANA has not ruled it out in the future.

Corbett criticized the SCCCL’s fight against nuclear waste, but not against nuclear power, as being irrational. She said the moment nuclear got a re-start in South Carolina, efforts to institutionalize renewable energy would be “stabbed in the heart.”

Corbett called for environmentalists, and legislators, to oppose nuclear power now, because to rise up against it later would be “too late.”

Crystal ball: All signs point to expansion at the Jenkinsville facility to soon be permitted by the feds. And with Senate President Pro Tempore Glenn McConnell (R-Charleston) having worked hard the last few years to ensure South Carolina’s energy-producing future would mirror nuke-heavy France, expansion will likely be welcomed in the Statehouse. But attempts to control regional nuclear expansion from the Statehouse may be a pipe dream, and the only thing holding back unchecked expansion may be the incredible construction costs of nuclear.

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

RECENT NEWS
Legislative Agenda

Committees back at it

With the House back Tuesday after a week’s furlough, the emphasis in that chamber will be in getting the wheel rolling in committee meetings, as evidenced by its large meeting schedule below. Otherwise, look for debate to start on the floor next week regarding the adoption of an international conservation code as the state’s energy standard.

With the Senate done with administrative restructuring, for a few weeks at least, and with the heavy lifting of retirement reform yet to come, look for more mundane issues, such as codifying provisos, to make brief appearances on the floor for debate.

House Ways and Means. The full committee will begin public, and televised, budget deliberations beginning Tuesday at 10 a.m. in 521 Blatt. Agenda.

House 3M. The full committee will meet Tuesday at 2:30 p.m. or an hour and a half after adjournment in 427 Blatt to discuss a bill that would decide who could receive the state Medal of Honor. Agenda.

House Judiciary. The full committee will meet at 2:30 p.m. or an hour and a half after adjournment in 516 Blatt to discuss a short agenda of recommended bills, which include one that could limit Freedom of Information Act requests. Agenda.

Senate General. The full committee will meet Wednesday at 9:30 a.m. in 408 Gressette to discuss a series of military related bills, among other issues. Agenda.

Senate Ag. The full committee will meet Wednesday at 10:30 a.m. in 207 Gressette to discuss a bill related to the structure of the state’s Conservation Bank. Agenda.

Senate Judiciary. A subcommittee will meet Thursday at 9 a.m. in 207 Gressette to discuss a bill that would force legislators to recuse themselves from voting on a bill that could cause them financial gain. Agenda.

House Ag. The full committee will meet Thursday at 8:30 a.m. in 410 Blatt to discuss a series of environmental bills. Agenda.

House LCI. The full committee will meet Thursday at 9 a.m. in 403 Blatt to discuss state loans permitting. Agenda.

Higher ed. The S.C. Higher Education Tuition Grants Commission will meet 10:30 a.m. Feb. 29 at the offices of the S.C. Independent Colleges and Universities, 1706 Senate St., Columbia. Agenda should be here.

Radar Screen

Time gobbler

With the Senate passing administrative restructuring and House fully involved with the budget process, the legislature is off to a quick start, compared to past years. And that’s a good thing, because redoing the state’s retirement system is going to gobble huge chunks of the rest of this year’s session -- and perhaps next year’s, too.

Palmetto Politics

Well, that was easy ... not

This week, standing on the shoulders of years of past efforts and administrations, the Senate passed a restructuring bill that transfers more power to the executive branch of state government.

The bill, which passed unanimously, would dissolve one of the crucial state entities, the Budget and Control Board, which has the ability to adjust mid-year state spending to the changing economic situation. Because South Carolina was the only state in the country with something like a budget board, it was a darling of Wall Street, which, in turn, gave the ability to the state to borrow money at a lower rate.

The board’s duties would be folded into a newly-created Department of Administration, which had been pushed for by Gov. Nikki Haley and her recent gubernatorial challenger state Sen. Vincent Sheheen (D-Camden). The bill doesn’t signal an abdication on the part of the legislature, as it would give the General Assembly the power to approve or deny budget deficits, which has been a consistent part of the state’s budgeting woes over the past few years.

The measure would also allow legislative committees to review the work and mission of all state agencies and programs, giving lawmakers a final say for the daily responsibilities of the governor in these matters.

The third big piece of the bill would be to discourage the governor from making across-the-board cuts when state coffers shrink. Haley’s predecessor, Gov. Mark Sanford, angered many in the legislature with his championing of broad cuts, preferring more surgical excising.

Despite the historic imbalance of power between the governor and the legislature, lawmakers had been saying quietly that Haley’s election was a mandate from the voters for a more responsive, accountable and executive branch-friendly form of government. Now the bill has to go to the House, which passed its own version last year. But, leaders said last week they were worried about amendments and last-second changes to the bill, especially once they send it back to the Senate, which is likely. Further complicating matters is the 14-item House GOP House caucus agenda items passed last year that is still languishing in the Senate. Some tricky political plays could come in as representatives could look for leverage with the Department of Administration bill.

Commentary

Time for Ard mess to come to a conclusion

By Andy Brack, editor and publisher

FEB. 17, 2012 -- Seven months ago, Lt. Gov. Ken Ard signed a consent order admitting 107 counts of violating state ethics rules by using campaign funds for personal items after his November 2010 victory. In the order, Ard agreed to pay a $48,400 ethics fine -- the second largest in the state’s history. Ard also agreed to pay $12,500 to reimburse the state for its ethics investigation and $12,121.35 to his campaign account for personal expenses.

Seven months ago, state Attorney General Alan Wilson sent Ard’s case to the statewide grand jury to review whether any criminal charges would be brought. 

Since then, the people of South Carolina have heard virtually nothing. 

His communications director isn’t talking: “That’s not something the lieutenant governor is able to comment on.” His lawyer isn’t returning calls. And the attorney general’s office is mum: “This office is prohibited by law from commenting on matters that are before the state grand jury,” a spokesman said.

And oddly, the Statehouse gossip mill isn’t churning: “We’re not even hearing rumors, which is even weird around here,” one insider observed.

As best as can be determined, the state grand jury continues to meet monthly on the matter and continues to probe. And Ard, disgraced and reprimanded, continues to put on a purple robe when the state Senate is in session to serve as its presiding officer.

This is not a good way for government to run. The whole mess has created an untenable situation that the public needs resolved. People deserve more than to be kept in a holding pattern about whether the state’s number two officer is going to face criminal charges. As South Carolina continues to try to attract new businesses and move about its business, it’s not helpful for her lieutenant governor to have a black eye that doesn’t seem to ever go away.

Heck, the lieutenant governor deserves better than to face the constant strain of wondering what’s going on. Remember, he’s faced the music at the state Ethics Commission and paid more than $72,000 in fines, costs and reimbursements for his post-election spending spree on fuel (18 expenditures over 50 days), meals (42 expenditures), lodging in five cities, football tickets, airfare, limo services, clothing (including a dress for his wife, men’s shoes, a jacket, pants and two T-shirts), cell phones and computer equipment (including a Playstation 3, flat screen TV, iPod Touch and two iPads).

So here are the options.

First, Ard could resign and deal with the situation as a private citizen. Then the Senate would shuffle into action because its president pro tempore would rise to fill the lieutenant governor’s shoes. (The current occupant of that job, Senate Judiciary Committee Chairman Glenn McConnell, R-Charleston, reportedly doesn’t want the number-two job and would resign so that another person could be elected president pro tem and then become lieutenant governor, but that’s drama for another day.) Under this option, the Charlie Brown-like cloud that’s been raining on Ard would dissipate. Whispering and acting as if nothing were wrong would be over (as much as it can be in Columbia). Things would return to what goes for normal.

Second, we can keep waiting. If Ard is not indicted, the cloud would go away, but his effectiveness would forever be in question because of the $72,000 black eye he got from the ethics probe. If he is indicted, he very likely would be suspended on the constitutional grounds of “moral turpitude” until he was acquitted. If later convicted, he would be removed from office.

Third, the grand jury can issue its report -- and sooner rather than later.

While it would be best for the state for Ard to resign, it’s easy to understand why he wants to stay on. More than likely, he feels he has paid the price for a bunch of dumb mistakes and a misunderstanding of what campaign funds can be used for. More than likely, he doesn’t believe he had criminal intent to defraud.

Regardless, one thing is for sure: it’s time for the whole thing to come to a head so we can all move on.

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

Spotlight

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My Turn

Local Government Fund key to providing essential city services

By Reba Campbell
Special to Statehouse Report

FEB. 17, 2012 -- The average person probably doesn’t give a lot of thought daily to the fact his garbage will be picked up, his toilet will flush, his neighborhood will be safe and clean water will run from his faucet. These are all services provided daily by our state’s 269 cities and towns. These are also services that require reliable funding sources to ensure they can be delivered consistently and safely.

The General Assembly is currently considering additional reductions to a critical funding source for these and other important city services … the Local Government Fund.

The Local Government Fund is part of the state budget that came about in 1991 as the result of simplifying collection and distribution of 11 separate taxes collected by the state on behalf of local governments. These taxes were primarily collected at the local level, remitted to the Office of the State Treasurer with portions sent back to the local governments based on a variety of formulas depending on the type of tax. The result was a very complex method of collection and distribution of tax dollars.

In 1991, the General Assembly simplified the process and created the Local Government Fund. The new method for calculating the amount appropriated to local governments was a simple 4.5 percent of the previous year’s state general fund base revenue.

The General Assembly and local government officials agreed to the 4.5 percent figure because it represented the amount of revenue received by local governments from these 11 taxes in 1990. Also, they agreed and wrote into the law that this 4.5 percent should be set aside each year before the General Assembly makes other budget commitments.

Because this calculation is based on a percentage of state revenue, the General Assembly and local governments understood in 1991 that as the economy and state revenues grew, so too would the revenue returned to local governments. And if the economy and state revenues declined, so too would the revenue returned to local governments.

However with the recent economic downturn, the Local Government Fund has been hit not only by the natural decline in the general fund but also by additional reductions imposed by the General Assembly.

First, there is a 20 percent decrease from 2009 to 2012 which is simply the result of a declining economy and decrease in state revenues. Cities and towns understood and expected that decrease.

Second, there has been an additional 20 percent reduction in the actual dollars distributed to local governments through the Local Government Fund from 2009 to 2012. This is a total reduction of 40 percent instead of the 20 percent as called for in state law.

A local example from Clinton, S.C., drives this point home. Since the late 1990s, major changes in the global and U.S. economies significantly changed the local economy in the city of Clinton, resulting in numerous textile mill and other industrial closings.

Clinton Mayor Randy Randall said, “Funding sources to meet local needs were going to drastically change, and we had to take steps to ensure the future viability of our long-time textile community. But through all these changes, we knew funding from the Local Government Fund was a consistent revenue source we could count on then and in the future.”

Randall noted the city leadership restructured operations to be able to run an already efficiently run city government in an even more efficient manner. The city took proactive steps to cut spending, eliminate waste and increase its local economic development products. Counting on the consistency of the Local Government Fund was an essential part of the city’s planning and funding for these changes.

This same story of the value of the Local Government Fund is true all over the state as local governments continue to balance increased service demand with declining revenue on many fronts.

Reba Campbell is deputy director of the Municipal Association of South Carolina.

Feedback

Unemployed, irritated at legislature’s disrespect

To the editor:

This [2/10, Davis: “More bills for the unemployed"]is utterly disrespectful; it’s a beat-down. It’s not domestic violence but legislative violence.

If I feel less than because I’m unemployed, how am I to feel once I’m subjected to this tag. Don’t build people up, tear them down and that’s how you keep your legislative seat.

The next proposed bill will be NO JOB = NO VOTE!  It gets sadder and sadder to live in SC.

Thanks. 

-- Just another statistic (name withheld upon request), Florence, S.C.

Agrees with Land, but equal funding necessary

I agree with S.C. Sen. John C. Land III [2/10: "An agenda for change"] when he said: We cannot expect to succeed as a state when we do not value our schools. Our current system leaves too many children behind, often in the state’s poor rural communities. It’s time to make state leaders abide by a higher standard.

We must start with equal funding. We need to do away with all property taxes, do away with all the assessors’ offices. Replace them with the funds from all the sales tax exemptions, funds paid by Act 388, homestead exemption and the first $100,000 deduction. That would pay all the funds schools, counties, cities and towns get now except for bonds. Bonds are long term and would be paid by a deed stamp fee of $21.00 per thousand of real estate sold. That way all schools and governments would be funded equally. Everyone including businesses would own their property and the state would insure that all children would get the same education no matter where they lived in the State of South Carolina. No more rich or poor schools.

-- David Whetsell, Lexington, S.C.

Captured spirit of Enterprise

To the editor:

Please pass my compliments to Mr. Brack on his wonderfully written article [2/3: “Carrier is 'shining city upon the sea'"] about USS Enterprise. He captures the spirit and special dedication of the young sailors perfectly, and paints just the right picture of those "shining cities on the sea." Nicely done, Andy.

-- Nevin Carr, RADM, USN (Ret.), Virginia Beach, Va.    NOTE: Carr recently retired as Chief of Naval Research in the Pentagon

Drop us a line.  We love hearing from our readers and encourage you to share your opinions.  But you've got to provide us with contact information so we can verify your letters. Letters to the editor 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.  Please include your name and contact information.

Scorecard

From real estate to restructuring to transparency

Real estate. Prices and sales have been steadily increasing statewide. More.

Restructuring. If it passes the House, the newly-created Department of Administration will streamline government and give it more oversight. It could work.

Sickness. Senate President Pro Tempore Glenn McConnell is out of the hospital, but not ready to return to work. More.

Loftis. More questions are surfacing regarding State Treasurer Curtis Loftis and his relationship to a state “pay-for-play” investment scheme investigation. More.

Gas. Per gallon prices headed toward $4. Yecch. More.

Education.  Thumbs down to state Sen. Mike Fair, R-Greenville, and Gov. Nikki Haley for fighting against federal Common Core standards due to “federal intrusion.” What’s next, secession? More.

Transparency. A bill that would allow cops to withhold from the public information about crimes and witnesses is too slippery a slope. More.

Stegelin

The perils of more secrecy


Also from Stegelin: 2/10 | 2/3 | 1/27 1/20
credits

Statehouse Report

Editor and Publisher: Andy Brack
Senior Editor: Bill Davis
Contributing Photographer: Michael Kaynard

Phone: 843.670.3996

© 2002 - 2014 , 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/.