Sunday, Jan. 16, 2005
jobs bill seeks to help small businesses
SC Statehouse Report
JAN. 16, 2005 - - For years, state politicians on the stump
have spouted rhetoric about the importance of small businesses
as the backbone of the state's economy. But when they returned
Columbia, they returned to old models of chasing large industries
of the S.C. House of Representatives were back in action
Now, the House GOP leadership has gotten the good message
that it's time to do something for small businesses, which
make up about 95 percent of the state's employers.
The House next week will consider the 2005 Jobs Creation
Act, a five-part bill that focuses on providing incentives
to some investors and job creators.
"I'm not looking at this being the cure-all, but I am
looking at it making some headway," said Michael Fields,
state director for the National Federation of Independent
Businesses. "It's a start at leveling the playing field
for economic incentives. We're starting to understand that
everything we're doing for large companies is well and good,
but it is high time that we start recognizing the role small
business plays in this state."
One of the key provisions of the bill will allow companies
that create at least five jobs in a year to receive an existing
state jobs tax credit. In counties of high unemployment, such
as Marion (17.7 percent) or Orangeburg (15.8 percent), employers
would be able to get an $8,000 credit. In less distressed
counties, employers who created at least five new jobs would
be able to get a credit that ranges from $1,500 to $4,500
based on the county's economic health.
The bottom line for this provision of the bill is that it
lowers the threshold for companies to get the credit for creating
jobs. Currently, companies have to create 10 jobs to get the
tax credit - - a provision that almost exclusively helps larger
This lower threshold isn't going to help all small businesses
get access to incentives. The state Chamber of Commerce and
other groups want the state to consider giving companies the
jobs tax credit based on percentages instead of hard numbers.
For example, if a company created at least 10 percent more
in new jobs, it should be eligible for a credit, the Chamber
WORLD: Skiing into trouble
Budget column was on the mark
Thumbs up/down and amixed review
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But advocates of the proposed measure say that's too much
for the state to absorb right now.
"Five is better than 10" jobs for employers to
get the tax credit, said House Speaker David Wilkins, the
Greenville Republican who is the key sponsor of the bill.
"The problem is we've got to start somewhere."
If the lower threshold passes, the state expects to lose
about $26 million in tax revenue by 2007-08 to pay for the
small business incentive, said State Revenue Department Director
Burnet Maybank III.
With the state moving out of an economic downturn, the number
of small businesses that could take advantage of the incentive
is unclear. According to Maybank, small business employers
in 2002-03 created 10,361 jobs that would have qualified.
But that was when the state's growth was down because of the
Fields pointed out that if lawmakers approved the incentive
measure, they'll be able to review it in two years to see
if it was working.
The incentives bill also includes provisions to encourage
investors to support new small businesses, particularly high-tech
start-ups, small manufacturers, suppliers and the like. These
tax credits to small business investors, which are worth 25
percent, don't apply to retailers and most small businesses,
but instead are targeted at new small businesses that otherwise
might not occur if the incentive were not available, Maybank
Other provisions of the bill call for a $2.5 million fund
to be established to provide security for banks that give
debt-equity financing to start-ups, and a measure that would
make South Carolina more attractive for companies that operate
distribution facilities in the state.
Lawmakers should be encouraged to approve these incentives
for small businesses but they shouldn't read their own press
releases too much. As Fields said, the measure is a good first
step, but most businesses won't be able to take advantage
of what lawmakers might approve.
The latest from cartoonist Bill McLemore:
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1/10: Don't be
fooled by simplistic approaches
To the editor:
Thank you for your column on Gov. Sanford's budget (Commentary,
1/9), which I read in the Morning News. Too many people
are fooled by simplistic approaches promising to reduce govt.
spending. Anyone who read your column would have the information
needed to think more deeply about the issue.
-- Tom Truitt, Florence, S.C.
1/9: Don't cut
the power of the people
To the editor:
I enjoyed your summation of Sanford's Budget program. Yes,
I agree, his approach to funding government appears to be
a Libertarian approach. Cut spending for government as much
as possible and it eventually results in cutting government
The problem with that approach, as I see it, is that in cutting
government power, he is also cutting the power of the people.
Government after all exists FOR people, ALL the people not
just a special few.
Your article about Sanford's budget noted and example of
selectivity in funding state highways. Rather than keeping
up with state highways needed within communities, the money
is cut out or reduced in favor of using Interstate Highways,
which fail to serve the needs desired in many instances. The
end result of this leadership attitude, is that it passes
the buck to the local communities needing those strategically
placed state roads. Consequently, either Local Government
winds up spending local funds to maintain the roads the state
should be responsible for or the state assesses just local
residents fees needed to do the job as is the case of the
DOT proposal to increase owners of vehicles with a South Carolina
registration a fee, in addition to their Registration Fee,
to pay for state roads within our communities.
This approach to funding community state highway needs is
wrong headed and places the burden on only local residents
within the state. There is a better way to garner needed funds
to do this job...A State Gas Tax increase which assures that
all users of the South Carolina highway system, be they residents
of nonresidents, pay their fair share and that local residents
are not stuck with the complete cost.
South Carolina's State Highway System has been sick for years
because, in my view, it is one of the stingiest taxers of
gas in the USA. It is time for a change and not the type of
change that DOT is contemplating. Our Registration Fee and
Property Tax on vehicles is enough, it is time to consider
an increase in State Gas Tax.
-- Bob Logan, President, We The People Of Horry County,
Little River, SC
believer supports Sanford
To the editor:
From your column -- "More than anything, it seems like
a cynical attempt to figure out more ways to cut government
I don't care how you look at it, or what you call it. If
the governor can cut the size and scope of government, more
power to him--and it's about time. Go Sanford!
-- Doug Kendall, Columbia, SC
SOUTH CAROLINA SCORECARD
Here's a "thumbs up" and "thumbs down" related to various
political events from the past week:
Smith, Saleeby. Congrats to Sen. Verne Smith, R-Greer,
who celebrated his 80th birthday. And hats off to the memory
of the late Sen. Ed Saleeby, a Darlington County Democrat
whose portrait was unveiled this week.
Hinson. Congratulations to Rep. Shirley Hinson, R-Berkeley,
who was named chief majority whip this week.
Sanford. The governor's tax cut proposal passed through
committee but he had a number of other problems as lawmakers
overrode some of his vetos, a charter school bill was delayed
by a fellow Republican and he was off at reserve training.
State Senate. GOP lawmakers might be slapping themselves
on the back for gutting the filibuster rule, but in the long
run it is detrimental to the system to run over the rights
of people who have positions that oppose the majority, regardless
of the issue.
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