S.C. Statehouse Report
Sunday, May 14, 2006
VIEW: http://www.statehousereport.com/columns/06.0514.scideas.htm


Lawmakers should look to the long term
By Andy Brack
Publisher
SC Statehouse Report

MAY 14, 2006 - - With just three weeks before the end of this year's legislative session, most lawmakers probably figure they only have time to finish with two big items - - the $5.6 billion state budget and property tax reform.

But there's a lot more they could do to make a real impact in the lives of South Carolinians:

Raise the minimum wage. Some 17 states have passed a higher minimum hourly wage than the $5.15 federal minimum set in 1995. Anybody with a lick of sense knows $5.15 per hour, which earns a worker less in annual wages than the poverty level, buys a lot less than it did 11 years ago.

In fact, South Carolina has the 10th largest growth in income inequality in the nation over the last generation, according to a January 2006 study by the Center for Budget and Policy Priorities and the Economic Policy Institute. It said the richest 20 percent of families in the Palmetto State have average incomes that are seven times that of the lowest 20 percent.

Raising the minimum wage would be a good first step to improving the lives of thousands of South Carolinians at the bottom and, as S.C.-born Federal Reserve Chairman Ben Bernanke has said, increasing the minimum wage likely wouldn't lower employment.

Limit sales tax exemptions. The state of South Carolina currently gives away more than $1 billion a year in sales tax exemptions to special interests. According to the S.C. Office of Research and Statistics, the state has more than 60 sales tax exemptions that cause the state to lose revenue on everything from the sale of newspapers and newsprint (a $9.4 million industry tax break) to electricity ($152.6 million a year.)

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Over the last 50 years, special interests have lobbied and won these big tax breaks, some of which make competitive sense. But the General Assembly should review these breaks to ensure they're continuing to achieve the policy goals for which they first were established. If they're not, they should be removed. In turn, the state could realize more revenue - - or use the money to lower the sales tax rate and make the state more competitive as a whole.

Property taxes. It almost seems a coincidence that the amount of money lawmakers are trying to get from raising the sales tax by 2 cents to replace property taxes is about the same as the amount it loses in sales tax exemptions. Lawmakers have been spinning around for months looking for ways in a campaign year to accede to the wishes of squeaky wheels who want lower property taxes. While the House and Senate may reach a compromise plan by the end of the session on June 1, it might be smarter for lawmakers to put off the decision until they really study the issue and impact a little more. From a public policy perspective, that would make the most sense because elimination of a lot of property taxes would make the state more vulnerable to economic cycles.

Early childhood education. Another coincidence: the House and Gov. Mark Sanford are pushing gasoline sales tax relief, which would cut the state gas tax for three months from October through December. The measure would cost the state some $100 million, or about $30 per consumer over the three-month period.

The same amount of money would create a good early childhood education system to give a lot of children a better chance of succeeding in life. Even though gas prices are high, if people had a choice to spend $30 to create opportunities that will pay long-term dividends for the state instead of a short-term tax break, many would pick the long-term option.

Cigarette taxes. State lawmakers so far have shelved plans to raise cigarette taxes, which are the lowest in the nation at 7 cents per pack. If the state were to raise these taxes to $1 per pack, it would realize more than $220 million annually and curb smoking. Eventually that would cause the amount of revenue to decline, but fewer people would be smoking, which would save billions in future health care costs.

It's tough to make public policy decisions. In modern politics, choices often are dumbed-down to soundbites. But lawmakers should look beyond the next election for the big picture. They should look at long-term impacts and benefits of choices they make. If they do, they might decide it's much better to fund a program that can help thousands of kids get a leg up at school or save thousands of lives by curbing smoking, instead of a tax break to get them past the next election.

Veteran political observer Andy Brack, publisher of SC Statehouse Report, has a new book of columns called "Bugging the Palmettos."


lighter side

5/14: Directionally challenged

Another great cartoon from Bill McLemore:


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scorecard

Here's a "thumbs up" and "thumbs down" related to various political news items from the past week:

Thumbs up

Hawkins: Several Republicans and Democrats railed publicly against the governor's veto of raising fines for not buckling in children in moving vehicles. But it was Sen. John Hawkins, the Spartanburg Republican and bill co-author who took on his party's governor. He made an impression of not being afraid to speak his mind: "If an adult doesn't wear a seat belt, they are making a conscious decision. A child can't appreciate the danger." More: Spartanburg Herald-Journal.

In the middle

Sanford: Gov. Mark Sanford won high praise from drivers and from his supporters in the Legislature, especially Sen. Greg Ryberg, R-Aiken, for proposing a taxless summer on South Carolina sales of gasoline. However, Democratic Party Executive Director Lachlan McIntosh immediately opined that Sanford must be worried about his primary in about a month because last September, he said he would take no such action. But we haven't heard from any transportation supporters or the Highway Department, already in financial trouble, about the governor's wanting to take 16.75 cents a gallon - about $40 million a month -from highway construction.

Sanford again: The governor has been overridden again, this time on a bill that should have been signed after it passed both houses. This one raises the fine for not correctly buckling children in car seats to $150, from $25. The governor deserved his comeuppance, 26-3 in the Senate and 60-14 in the House. That means 17 senators and 50 representatives did not vote at all, numbers hardly any more exciting than another misguided veto.

Thumbs down

Page: The president of the South Carolinians for Responsible Government, Randy Page, said in reaction to the House voting down, 59-52, a school choice amendment, "Unfortunately, there are still a large number of cowards in the … House of Representatives …" That, from a pressure lobbying group against public schools that refuses to open its books for ethics examination. More: The Sun News, May 4, "School-choice plan shot down in House"

Edge: "[C]ommunism fell because people had no choices. Today's schools system wants you to have no choices," Rep. Tracy Edge, R-North Myrtle Beach, said May 3 on the House floor in pursuing his amendment to create a school-choice law. It was an unfortunate comment, to say the least, that linked public schools and communism. More: The SCEA.


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  • JERRY AUSBAND: Looking at a (TERI)ffic nest egg
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  • RADAR SCREEN: Looking ahead for a few months
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  • MEGAPHONE: Nothing like being cutting edge

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