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S.C. Statehouse
Report
Sunday, April 30, 2006
VIEW: http://www.statehousereport.com/columns/06.0430.econ.htm
Mixed bag of
economic news for Palmetto State
By
Andy Brack
Publisher
SC Statehouse Report
 APRIL
30, 2006 - - At first blush, a spate of recent economic news
might make you think that things aren't too rosy in the Palmetto
State.
For example, the state's unemployment rate, still fourth
highest in the nation, inched up in March by one-tenth of
a point to 6.5 percent.
Meanwhile, new federal figures show South Carolinians are
earning more income - - about $1,200 a year on average from
2003 to 2004 - - but the state's average income ranking dropped
two slots to 44th in the nation. In other words, we're doing
a little better, but we're not keeping up with the rest of
the country.
But economists say there are limitations at looking only
at those numbers as economic indicators.
Just as the S.C. Employment Security Commission was reporting
the slight increase in unemployment, Gov. Mark Sanford countered
that the rate actually decreased in every county. Unlike the
ESC, which used seasonally-adjusted data, Sanford used unadjusted
employment figures, which showed the rate dropped from 6.9
percent to 6.4 percent.
While some wags may accuse the governor of using a different-than-usual
set of numbers to make things look better for his political
campaign, Clemson economist Bruce Yandle noted, "The
world isn't seasonally adjusted."
Economists say the unemployment rate, generally reported
in the press as a seasonally-adjusted average, is an imperfect
reflection of what's really happening because it is based
on a small sample and misses sectors, such as black market
labor. Additionally, it can be misleading - - teachers, for
example, usually are on a 10-month cycle, which can cause
summer blips.
Columbia economist Harry Miley said a better indicator of
the robustness of the economy may be in monthly data on tax
collections. Looking at sales tax collections, for example,
shows whether people are buying stuff or holding off.
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According to state data, South Carolina collected $198 million
in sales taxes in March - - a 13.6 percent increase over the
$174.4 million collected in March 2005. (For comparison, March
2004: $189.8 million; March 2003: $160.9 million; March 2002:
$153.6 million.)
Income withholdings data shows a similar trend. The amount
withheld and sent to the state for income taxes in the fourth
quarter of 2005 was $829.7 million - - 4.7 percent higher
than the $792.2 million collected for the same span in the
previous year.
In other words, based on data that is closer to what is happening
- - actual sales and income - - the state has been growing.
Incomes are up. Activity is up.
But again, those numbers might not give the whole picture
because they are statewide averages, which tend to be skewed
to successes in urban areas like Columbia, Greenville and
Charleston.
"You just can't go to Allendale, Hampton, McCormick
or Marion counties and say our economy is any better off,"
Miley noted.
* * *
With all of this focus on numbers, there is some good news
for people who think South Carolinians pay too much in taxes.
It turns out we're paying much less when compared to other
states. New figures from the U.S. Census Bureau show South
Carolinians pay $1,719.95 per person annually in state taxes,
which is 43rd in the country. Twenty years ago, the state's
per capita tax collections were ranked 27th nationally.
What's happened? The General Assembly reduced taxes overall
from 7 percent of per capita income in 1985 to 6.1 percent
in 2005 through a variety of measures, according to an April
10 letter by state economist Bill Gillespie. Among the measures:
indexing income tax brackets, reducing corporate and capital
gains taxes, and a variety of tax incentives. Also, the General
Assembly provided property tax reductions in the 1990s that
exempted $100,000 of value of homes for school operating purposes.
Gillespie's conclusion: "It is clear from the Census
figures that South Carolina is among the lowest taxing state
governments."
Veteran political observer Andy Brack,
publisher of S.C. Statehouse Report, has a new book of columns
called "Bugging
the Palmettos."
4/30: Time for
dirty tricks
Another great cartoon from Bill McLemore:
 The
best way to get South Carolina news is to augment your morning
paper and TV show with SC Clips, a daily executive
news summary compiled from more than 30 state newspaper and
TV sources. It's delivered every business day and is packed
with news of statewide impact, politics, business and more.
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Recent
feedback
Ahead on inspector
general
A look at how you often learn first about things in SC Statehouse
Report:
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From Statehouse
Report,
7/31/05:
"If the state invested $1 million
a year in a new independent Inspector General's office,
it likely can reap $100 million annually in efficiencies,
improving customer service and boosting performance
of state agencies. And, of course, it will be able to
find any "waste, fraud and abuse" that does,
in fact, exist."
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From this week's bill introductions:
S
1382 General Bill, By Sheheen, Lourie and Setzler
A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA,
1976, BY ADDING CHAPTER 6 TO TITLE 1 SO AS TO ESTABLISH
THE OFFICE OF STATE INSPECTOR GENERAL, AND TO
PROVIDE THE QUALIFICATIONS, DUTIES, POWERS, AND RESPONSIBILITIES
OF THIS
OFFICE.
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Here's a "thumbs up" and "thumbs down" related to various
political news items from the past week:
Thumbs
up
Leventis. For his fortitude, this past week's award
goes to Sen. Phil Leventis, D-Sumter, for his attempt to reverse
the Senate's pending approval of the so-called "right-to-farm"
bill. He pointed out that the bill allows a poultry farm to
use a neighbor's land as a buffer required by law, without
the neighbor's permission. The bill passed any way on a cloture
motion by Sen. Larry Martin, R-Pickens. But Leventis made
his point clearly, no matter that Martin and others did not
listen.
Moore. Sen. Tommy Moore, D-Aiken, may well have made
the best recommendation yet for use of a larger tax on cigarettes.
A gubernatorial hopeful, Moore would add 39 cents a pack to
the present 7 cents and dedicate the income to help half of
800,000 uninsured workers and small businesses to afford health
insurance. Trading a pack of taxes for better health sounds
as if it makes sense for the state.
In
the middle
Taylor: The governor's new secretary of commerce, Joe
E. Taylor, has gotten all sorts of praise in the second floor
Statehouse for his personality and his dealings with the legislators.
Legislators seem pleased, and that may explain in part why
not much was made in the Legislature over Taylor's admitted
"colossal error" in announcing a new Spartanburg
industry that had not yet signed a contract for its call center.
He apologized, and that could well make the difference, because
there was no call for Taylor's resignation in an economically
needy state.
Thumbs
down
Richardson: Sen. Scott Richardson, R-Hilton Head,
joined in the disagreement over whether local funding should
be allowed into the "wish list" (to be spent if
money is left over), by arguing against the amendments. Not
long after, Richardson put up an amendment that would allocate
$7 million to repay Beaufort County Schools for what he called
a "hogwash" in a school appropriation formula last
year.
Charter schools: Two days after the Legislature finally
agreed on what is believed to be the first statewide charter
school district in the nation as a means of making charter
schools easier to open, word came on Thursday from Charleston
that the second of two charter schools there has failed. The
latest could not pay its bills, even with state money for
students just like the public schools.
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In each issue of Statehouse Report, you'll get:
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