Improving Our Economic Climate
From day one, this administration’s goal has been to make South Carolina more competitive in attracting jobs and capital investment. There are a number of obstacles to that goal – including a system of tax incentives that lavishes new businesses with taxpayer-funded perks while ignoring existing companies, a tort system ranked among the worst in the U.S., and an unaccountable Employment Security Commission.
Still, we’ve made some progress over the last 6 years. In 2007 we pushed the Legislature to return more money to hard-working taxpayers, resulting in the largest recurring tax cut in state history – totaling $221 million. Before that, we achieved the state’s first-ever small business income tax cut, reducing the top income tax rate for businesses from 7 percent to 5 percent. Our Department of Commerce has posted back to back record-breaking years in capital investment and job creation: in 2007, $4.05 billion in capital investment and 15,666 jobs created; in 2008, $4.1 billion in capital investment and 19,000 jobs created. Indeed 2008 represents a 57 percent increase since 2005 (2.66 billion) and a 270 percent increase since 2003 (1.12 billion). We’ve seen a number of major corporations make major investments in South Carolina – among them Google, Starbucks, Adidas, and Michelin. Through their work South Carolina’s job growth rate ranks 14th in the nation since 2003, and our labor force growth rate ranks 6th in the nation – meaning that people continue to see South Carolina as a place of opportunity.
We’re not only focused on bringing new jobs to South Carolina; we’re also focused on making sure those who want to work can find a job. A Department of Commerce study found that a sizeable proportion of laid off workers were unable to find new work because they lacked the skills necessary. To address this problem we initiated a QuickJobs Carolina program to help the unemployed develop the skills they need to reenter the workforce. Similarly, we are working to ensure that our state’s youth receive the skills they need to enter the workforce. In 2003 a US Department of Education study found South Carolina had the 2nd worst high school graduation rate in the nation. Today, we target at-risk youth with our Jobs for America’s Graduates (JAG) program – recently ranked one of the top 5 in the country with 92 percent graduation rate in 20 schools statewide.
Another way to add focus to matching workers with vacant jobs is to change the current structure of the Employment Security Commission – a structure that has allowed it to potentially rack up a billion-dollar deficit by the end of 2009. A restructured, more financially stable organization will be able to focus more aggressively on pairing unemployed workers with vacant jobs.
For six and a half years we have proposed improving the business climate in South Carolina to the benefit of all companies. The Tax Foundation has reported that our tax plan (phasing out the corporate income tax; cutting small business and personal income tax) would increase South Carolina’s tax climate ranking from 26th in the country to 6th (trailing only Florida among Southern states). The cost of these changes would be offset by eliminating some business incentives that are ineffective, and by a 30 cent increase in our lowest-in-the-nation cigarette tax.
While we passed the first-ever Tort Reforms in state history in 2005, according to the US Department of Commerce South Carolina still has the 8th worst Liability System in the country. In order to improve our standing, we’ve urged the General Assembly to adopt Speaker Harrell and Senator Larry Martin’s bill that would, among other things, create reasonable caps for punitive damages and establish guidelines and caps for pain and suffering awards.
We think these measures will go a long way toward making South Carolina more competitive – and ultimately a better place to live and work. I’d simply ask you to join us in the effort.