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ISSUE 12.14
Apr. 05, 2013

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

Index

News :
Weighty rates
Radar Screen :
End of the road?
Commentary :
Sanford will be tough to beat
Spotlight :
S.C. Policy Council
My Turn :
Early education is the best answer
Feedback :
Want to vent? Tell us ...
Scorecard :
From trust to T-Rav
Stegelin :
The real winner
Megaphone :
Nullify this
Tally Sheet :
New bills coming next week
Encyclopedia :
Havilah Babcock

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NUMBER OF THE WEEK

1.4 million

That’s the number of taxpayers who signed up for free credit monitoring and identity theft protection as of the Sunday registration deadline. The state is offering the services after a computer hacking incident in the Department of Revenue saw millions of files stolen last year. But fewer than 11,000 of the nearly 700,000 eligible businesses had signed up. More.

MEGAPHONE

Nullify this

“Nullification ... is what put this state where it is today, and to have legislators talking about passing laws that nullify federal law, that is absolutely stupid.”

-- U.S. Congressman Jim Clyburn (D-S.C.), commenting on the raft of nullification bills filling the floor agendas in the House and Senate. More.

Bravo, really?


“Bravo! Gentile Charleston to be on TV for all to see”


-- Friday headline in The Post and Courier on a story about a new reality TV show based in Charleston. Earth to newspaper:   Look up “genteel.”

TALLY SHEET

New bills coming next week

With the Senate and House on furlough again this week, there were no bills introduced in the General Assembly.  You can, however, use the links below to find any bill that has been introduced this session:

ENCYCLOPEDIA

Havilah Babcock

Educator and writer Havilah Babcock was born on March 6, 1898, in Appomattox, Virginia, the son of Homer Curtis Babcock and Rosa Blanche Moore. He earned an A.B. from Elon College in 1918, then pursued graduate studies at Columbia University, the University of Virginia (A.M., 1923), and the University of South Carolina (Ph.D., 1927). On June 3, 1919, he married Alice Hudson Cheatham. He briefly taught high school English in Virginia before joining the faculty at the College of William and Mary in 1921. In 1926, Babcock came to the University of South Carolina (USC) on a year's sabbatical leave. He found the people, school and state so hospitable that he stayed 38 years, joining the English department and becoming a fixture at the university.


Babcock

At USC, Babcock was an institution about whom truths and legends were freely circulated. He might begin a class with "I'll give twenty-five cents to anyone who can spell Houyhnhnm," and reportedly he greeted students with a broadside of snowballs after a rare southern snowfall. His jovial bond with students made his courses the most sought after at the university, causing students to sign up a year in advance for his English 129 course entitled "I Want a Word." In this vocabulary and semantics course, students learned of the charm and power of words as they listened to Babcock reveal their nuances and connotations.

Babcock was equally at home in the field as at the blackboard. He used the outdoors as a canvas to draw a vast array of colorful characters, becoming a master of the hunting-fishing tale. His stories were replete with references to English and American literature. More than one hundred of his stories found their way into print in a variety of newspapers and magazines, including Field and Stream. Anthologies of his works include My Health Is Better in November (1947), Tales of Quails'n' Such (1951), I Don't Want to Shoot an Elephant (1958), and Jaybirds Go to Hell on Friday, and Other Stories (1964). His writing traveled the literary spectrum with ease. In his novel The Education of Pretty Boy (1960), Babcock wrote of a young boy's gun-shy bird dog because he thought the dog "was too pretty not to be immortal."

Babcock's writings continued their popularity years after his death. A reviewer from the New York Times once compared his writing to "a rare old Bourbon you want to make last as long as possible." A counterpart at Field and Stream applied a similar metaphor: "Like a good wine," Babcock's stories "grow better with age." Babcock died in Columbia on December 10, 1964, and was buried in Appomattox, Virginia.

Excerpted from the entry by Francis Neuffer. 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

Weighty rates

Efforts underway to fix coastal insurance

By Bill Davis, senior editor

APRIL 5, 2013 -- Either a bill introduced by state Sen. Tom Davis (R-Beaufort) to better regulate the state’s expensive coastal property insurance market is a “good start,” or it’s just another handout to rich and powerful insurance companies already making big profits in South Carolina.

The Competitive Insurance Act, S. 569, is intended, according to Davis, to correct the “disconnect” and “imbalance” in what he said was a broken property insurance market.

After poring through data comparing what South Carolina coastal homeowners pay to what property owners pay in more weather-vulnerable parts of the country, Davis said he was convinced South Carolinians are paying more than the amount of risk that insurance companies are taking on.

Davis, a self-described small government and free market fan, said the fault for the “disconnect” came from three sources -- consumers, state regulators and insurance companies.  All three created a “lack of equilibrium” in the market, he said, because consumers didn’t shop aggressively enough, bureaucratic preparations for Obamacare could have distracted regulators, and the companies might have taken advantage of the situation. 

“A lack of equilibrium? If we have ignorance in South Carolina, what do they have along the Gulf Coast? Geniuses?  I don’t think this is the right approach to finding a policy solution.”

-- Economist Holley Ulbrich
His bill, introduced in what said was a “skeletal” form to be better shaped by hearings, debate and the subcommittee process, would attack this disconnect in four different ways:

  • First and foremost, Davis said the bill calls for creation of an information exchange to allow  consumers to become more informed.

  • Second, the bill seeks to entice more providers to the state, in part, through tax incentives.

  • Third, it seeks to improve the rate-setting process through a beefed-up state insurance department and better transparency efforts, such as annual reporting to the legislature and public.

  • Lastly, it proposes to encourage more property owners to take advantage of an already existing state program through which they could receive incentives for weatherproofing their coastal homes. 

Squeaky wheel

A big push for this kind of reform has come about thanks to the efforts of a group of Lowcountry businessmen led by former telecom executive Daryl Ferguson.

Ferguson has been a regular presence at legislative committee meetings for the better part of the past year. He has presented research on the inequities of what he and his neighbors pay compared to coastal home and property owners in the Gulf states.

Ferguson told a recent Senate committee earlier this year that there was no one on staff at the Department of Insurance to compare and challenge insurance company rates, and partly as a result, property owners have paid the price while insurance companies have reaped the windfall.

State Insurance Department Director Ray Farmer this week denied Ferguson’s claim, saying that state analysts, staffers and actuaries carefully review and sign off on every rate in the state.

Farmer also pointed out that states like Mississippi subsidized their catastrophic insurance pools by throwing in $400 million a year to keep rates lower.

But at a recent committee meeting, Farmer, a former insurance industry lobbyist, brought in an actuary from Atlanta to review the state’s rates structure. By and large, that analyst said that the state’s rate structure made sense and was competitive.

In fact, Farmer said this week state data showed insurance companies spent $1.08 on claims for every dollar they took in premiums for the past year.

It should be pointed out that insurance company profits are a complicated alchemy linking risk to rates of return on the stock market, which saw sectors enjoy steep increases in value over the past year.

The great unknown

Scott Richardson, one of Farmer’s predecessors under Gov. Mark Sanford, said the real problem with coastal insurance rates is the uncertainty of the weather events themselves.

Some hurricanes, like one that hit Texas in recent years, may have been a smaller, less powerful hurricane compared to Katrina or Hugo, but it still did major damage because of its width and how it lingered over the state, said Richardson, now a lobbyist.

Davis’ bill has received some support from across the aisle. State Sen. Vincent Sheheen (D-Camden) has reviewed it and called it a “good start” that needed to be further fleshed out in the committee process.

But other Democratic sources in the Senate are already panning the bill because they say it focuses too much on incentives for insurance companies, not ratepayers. Davis said he hoped that opponents would go into the debate process with a mind as open as his to what will be the best practices for the state going forward.

Holley Ulbrich, an economics professor emeritus at Clemson and a fellow at the Strom Thurmond Institute, upon hearing about the insurance incentives, joked: “Which insurance company wrote this bill for him?”

Ulbrich, a regular critic of many conservatives’ efforts in the state, thought the focus on educating the consumer was disingenuous, considering the complexity of the insurance game and those who’ve mastered it in that industry.

“A lack of equilibrium? If we have ignorance in South Carolina, what do they have along the Gulf Coast? Geniuses?” asked Ulbrich. “I don’t think this is the right approach to finding a policy solution.”

Crystal ball: Davis hopes to have some solid work done on the bill this session and over the summer. But if he wants to have bipartisan support, he'd better be ready to jettison the consumer focus in the bill and have more eyes trained on the industry. Otherwise, it’ll become a talking point soon discarded next session.  And what will that mean? Everyone along the coast -- tourists, homeowners, business owners and renters -- will be on the hook for higher property insurance rates.

Bill Davis is editor of Statehouse Report.  He can be reached at:  billdavis@statehousereport.com. Recent news stories include:

Legislative Agenda

Game on

After two weeks of furlough, state legislators return next week to begin the ersatz second half of the legislative session. First up in the Senate, a bill allowing concealed weapons in bars and nullification. In the House, raffles!

  • Education. The Education Oversight Committee will meet Monday at 1 p.m. in 433 Blatt to discuss funding issues, among other topics. Agenda.

  • House Judiciary. The full committee will met Tuesday at 2:30 p.m. or an hour and a half after adjournment in 516 Blatt to discuss bills related to whom can carry a concealed weapon and federal health care nullification, among others. Agenda.

  • Senate Banking and Insurance. A subcommittee will meet Wednesday at 9:30 a.m. in 408 Gressette to discuss a bill dealing with high coastal property insurance rates. Agenda.

  • Senate Finance. A subcommittee will meet Wednesday at 9:30 a.m. in 105 Gressette for budget hearings on DHHS and Medicaid. Agenda.

  • Senate LCI. A subcommittee will meet Wednesday at 10 a.m. in 209 Gressette to discuss bills that would suspend unemployment benefits for overpayment or drug use. Agenda.

  • Senate Banking and Insurance. The full committee will meet Wednesday at 11 a.m. in 308 Gressette to discuss bills that would change how an agency head is hired and protecting the state from identity theft. Agenda.

  • House LCI. The full committee will meet Thursday at 9 a.m. in 403 Blatt to discuss a full agenda of smaller bills. Agenda.

  • Senate Judiciary. A subcommittee will meet Thursday at 9:30 a.m. in 209 Gressette to discuss bills related to ethics reform. Agenda.
Radar Screen

End of the road?

Despite the common sense realization that the issue whether to accept billions of dollars of federal Medicaid expansion money is dead in the water this year in the legislature, Democrats are still expected to make a stand on the floor during budget debates in the coming weeks. While the result probably won’t be any expansion along the lines of Obamacare, good debate is expected and will lay the groundwork for the coming years’ fight.

Palmetto Politics

Tax free

Congratulations, South Carolinians: You’ve paid off the man! According to the nonpartisan watchdog, Tax Foundation, April 3 was the day the average South Carolina resident had earned enough money to pay off his or her tax obligations, from the local to the federal level.

Contrary to what many conservative thinkers have said about the state’s tax structure, South Carolina, with its relatively low pay scales and tax burden “paid off” its taxes 15 days before the national average, and is the fourth earliest “Tax Freedom” day in the nation. For more information, go here.

Higher Ed hire

After more than a year of searching and interviewing, the S.C. Commission on Higher Education announced this week that it had found a new leader. The commission this week named Richard Sutton as its new executive director. Sutton comes to South Carolina after decades of work in the academia throughout the country. The commission coordinates efforts among the state’s 33 institutions of higher learning, wherein nearly 250,000 students are served every year.

Commentary

Sanford will be tough to beat

By Andy Brack, editor and publisher

APRIL 5, 2013 -- You’ve got to admit one thing about Mark Sanford: He knows how to win elections.

Sanford’s 14-point GOP runoff victory this week over former Charleston County Councilman Curtis Bostic was the 12th straight time the former governor won outright or placed first in a crowded primary.

Back in 1994, an unknown Sanford burst onto the political scene. In the GOP primary, he beat better-known candidates like former state Sen. Mike Rose and Bob Harrell, father of the state’s current House speaker. The only time Sanford ever came in second was in that 1994 primary when he garnered 19 percent (10,568 votes) to 31 percent for Van Hipp Jr., then a former chair of the state GOP and a deputy assistant secretary of the Army. In the runoff, Sanford beat Hipp by 2,383 votes. In 1996 and 1998, he had no major party challenges and won re-election handily. 

Sanford left Congress on a term-limits pledge and seemed to be done with politics. But, surprising many, he got itchy and ran for governor in 2002. He topped the field of seven in the GOP primary and beat former Lt. Gov. Bob Peeler in a runoff by a 20-point margin.  He went on to beat incumbent Gov. Jim Hodges by a 53-47 margin in the general election. Four years later, he handily won a GOP primary and later re-election.

There’s no avoiding that Mark Sanford is the consummate campaigner. In every race, he adapts. He sticks to his message. He runs with the passion of an acolyte of whatever he’s pushing. In the 1990s and as a gubernatorial candidate, his mantra was libertarian economics -- cut government spending and be so fiscally conservative that you write on both sides of a Post-it note. 

Following Sanford’s much-publicized fall from grace while governor, he has been talking squarely to the camera this year with a message of conservatism mixed with old-fashioned religious redemption. His campaign erects big plywood signs that say “Sanford saves tax $,” making it look like his professional campaign is so tapped out that it has to make its own signs. Hogwash. The wooden signs are more expensive (and heavier) than the slick cardboard ones, but Sanford knows the homemade signs look better for his image.

The only person now standing in the way of Sanford returning to Congress is Elizabeth Colbert Busch, a Democratic neophyte believed to have a chance, in part, because she’s the sister of comedian Stephen Colbert.

But if Busch is going to win, she’s going to have to get mean enough to peel the paint off today’s Sanford and his message that he’s seen the light. Remember what the lead character in the Netflix series “House of Cards” said about people on the comeback: “Redemption narratives are powerful stories.”

For Busch to win, she’s going to have to raise significant money and focus on the thing Sanford doesn’t want to talk about -- how he was “absent without leave” from the state when he jetted down to Argentina to see his mistress but told his staff he was hiking the Appalachian Trail.

In military communities like Charleston and Beaufort, the message of Sanford abandoning his post to fuel his personal needs might be the only thing that Busch can use to win. But will she? Talking about how Sanford did little in Congress in his six years in Washington -- other than sleep on a couch and vote against funding for the Cooper River Bridge -- isn’t going to upset GOP rank-and-file voters.

Several years ago when I ran (and lost) in the First District for Congress, I realized one big thing: If the ballot had a choice for “no one” to represent them in Washington, they would probably vote for that more than other choices. In the 2013 reincarnation of candidate Sanford, they just might get what they really want.

One thing is for sure: Regardless of which candidate wins the congressional seat in the May 7 special election, the big winner will be the comedian, Stephen Colbert, just like Steve Stegelin, Statehouse Report’s cartoonist, penned in this week’s issue.

Andy Brack is publisher of Statehouse ReportYou can reach Brack at: brack@statehousereport.com.

Spotlight

S.C. Policy Council

The public spiritedness of our underwriters allows us to bring Statehouse Report to you at no cost. This issue's underwriter is the South Carolina Policy Council. Since 1986, the Policy Council has brought together civic, community and business leaders from all over our state to discuss innovative policy ideas that advance the principles of limited government and free enterprise. No other think tank in South Carolina can match the Policy Council's success in assembling the top national and state experts on taxes, education, environmental policy, health care and numerous other issues. That ability to bring new ideas to the forefront, lead the policy debate and create a broad base of support for sensible reform is what makes our organization the leader in turning good ideas into good state policy. For more information, go to: www.scpolicycouncil.com.
My Turn

Early education is the best answer

By Terry E. Richardson Jr.
Special to Statehouse Report

APRIL 5, 2013 -- We complain constantly about entitlement programs and their costs, the costs of our criminal system and remedial measures, which are extremely expensive in our school system from K-5 through the twelfth grade. However, we continue to ignore the scientific foundation which provides answers to so many of these social problems. 

Admittedly, it is difficult giving children born into horrific family situations an adequate opportunity in life. However, the science and the data are absolutely overwhelming that we can solve many of these problems and give the infants an opportunity to be self-sustaining, taxpaying, working members of society rather than wards of the state.

Enrichment opportunities through gestation and the first two years of life can make the difference. Virtually all mothers want to be good parents but do not have those skills or experiences. Thus, we must assist disadvantaged mothers to be the very best teachers for these infants. 

Research confirms that home visitation programs are invaluable in assisting those mothers to become the infants’ first and best teachers. Programs such as Nurse-Family Partnership (which has 33 years of outstanding data and provides a nurse to assist first-time mothers during gestation and the first two years of life), Parents as Teachers, Early Steps (by Save the Children) or other home visitation programs that provide that new mother with the background to provide a verbally rich and stimulating environment to her infant. The return on investment in these early home visitation programs is the greatest return of any charitable or governmental dollar spent on any program (returning anywhere from $7 to $19 per dollar invested).

"The return on investment in these early home visitation programs is the greatest return of any charitable or governmental dollar spent on any program (returning anywhere from $7 to $19 per dollar invested)."
To not provide that early foundation is recognized as impairing brain development that is unable to be recovered at a later time. Later interventions are similar to attempting to patch the cracked walls of a building with a poor foundation, or trying to salvage a crop in late summer after lack of care in the early spring.

The more one learns about any subject, the more complex it becomes. What else should we do with the one-third of our population that is being born into families who do not have the educational foundation to provide the enriched environment for that infant during these critical first two years? No one has standing to complain about the 80 years of entitlements or burdens on our society by these deprived infants if we are not willing to commit to enhancing our greatest asset, our human resources, during this early stage of brain development. What business would not develop its raw materials to the optimum? However, we blindly ignore what has been proven time and again to our great long-term detriment.

Even if we lack the compassion for the innocent infants born into less than optimum situations, we should make the financial commitment at this early stage to avoid the devastating long-term financial consequences that we know will follow by our neglect. The Federal Reserve Board itself, in raw economic terms, has determined that the best economic development tool available is early childhood education. 

We know there is almost a one-to-one correlation between those infants entering school not ready to learn and those that will drop out and never be available to compete in the modern economy. These deprived individuals are destined to be long-term burdens, financially and otherwise to our state. Compassion and a selfish motive both dictate that we must make a commitment to every infant born in this state. The ever-complex free enterprise system dictates more and more education is required by our work force. The problems of yesterday will only become worse tomorrow if we continue to leave one-third of our infants behind.

  • NOTES: See “Changing the Odds of Children at Risk” by Susan B. Neuman, one of the educational leaders of the Bush Administration who summarizes the science by stating:

  • “We had concrete evidence of the brain’s activities” that “showed . . . a tremendous amount of brain development occurs between conception and age one. Most of the humans’ life-time supply of brain cells . . . is actually produced between the fourth and seven months of gestation. Once formed the cells will later migrate to locations required for language, vision and connections between the two.”

  • “Intense spurt in production” of brain development “will occur over the next three years – more than the brain can possibly use. .. Those that are only seldom or never used get eliminated, literally sculpting masses of cells into patterns of emotion and thought that are, for better or worse, unique. Deprived of environmental stimuli the child’s brain suffers. For example, researchers have found that children who don’t play much or are rarely touched have smaller brains – as much as 20 to 30% smaller – than normal for their age.”

  • “Substantial evidence shows that neglect (including lack of touch) in the early stages of life has long-term effects on coping, making it difficult . . . to respond to stressful events. . . . [S]tress can seriously inhibit the ability to learn.”

  • She summarizes by saying that “brain development takes place before one year of age and is much more rapid and extensive than previously realized and brain development is much more vulnerable to environmental influence than previously suspected and stimulation has a long-term influence on brain development. Good nutrition supports optimal early brain development. (Page 3 and 4.)

  • She further goes on to say that “the cost and benefits of early intervention programs . . . have shown real returns on investments . . . Many of the most pervasive and intractable problems faced by young children and their parents can be traced to maternal health. Voluminous literature of over 100 articles in Peer Review journals attest that when growth fostering interventions are put in place, families can rebound and lead to highly productive lives.” (Introduction.)

Terry E. Richardson Jr. of Barnwell is a founding partner of Richardson Patrick Westbrook and Brickman. In 2008, Francis Marion University dedicated its state-of-the-art child care center as the Gail and Terry Richardson Center for the Child.

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Scorecard

From trust to T-Rav

Trust. Despite a monumental hacking incident, or perhaps because of trust in how state government handled the incident, there has been no drop-off in numbers of state tax returns being filed electronically this year. More.

Early care. A new study shows that early, free medical care helps poorer, pregnant mothers have healthier babies that may not burden the state more in the long run. Shocker. More.

Jobs. While the job market here is still not good, it is better this month than in past months, with employment nearly at 2 million, and the unemployment rate dropping a tenth of a percent to 8.6 percent in February. More.

Crime. Murder is up across the state, while overall violent crime is down. More.

T-Rav. Former state treasurer and convicted felon Thomas Ravenel has been cast in a Bravo network show called “Southern Charm” that will be shot in Charleston. And who said there were no second acts in America? Oh right, Mark Sanford. More.

Nukes. Even the president of the company hired to build a facility at the SRS to turn weapons-grade plutonium into fuel knows it’s gonna be more expensive than originally thought. Shocker. More.
Stegelin

The real winner


RECENT STEGELIN: 3/29 | 3/22 | 3/15 | 3/8
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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/.