The big issues this Session

Back to work. This Session we will be working on tax restructuring and rebuilding the South Carolina retirement system. Thankfully the economy has started to turn around and there should be additional funds for public school education and our teachers will hopefully see a pay increase for the first time in four years. It is my pleasure to serve in the SC House. As always, feel free to contact me with your concerns and questions. If you are a member of a group or club that would like a Legislative update I would be happy to come and speak to your organization. 

 

By N. DOUGLAS BRANNON
For the Herald-Journal

Published: Wednesday, June 15, 2011 at 3:15 a.m.
Last Modified: Monday, June 13, 2011 at 3:50 p.m.
After significant thought on my part and the urging of many, I decided to write this to explain why I made the motion to table and voted to table H-3407 (the South Carolina Educational Opportunity Act).

There are four primary reasons the motion to table was made.

 Reason 1: The cost of H-3407 in terms of reduced general fund revenue is impossible to calculate. Under the proposed bill, there are no limits put upon the amount an individual or corporation may contribute to a scholarship organization, no limit to the number of scholarship organizations that can be formed, and the bill allows for “stacking” of tax credits in such a way that multiple taxpayers could claim tax credits on the same student. Under this proposed bill, all taxpayers could have eliminated 95 percent of their state tax liability.

 Reason 2: This bill offered choice to a limited group of taxpayers, and none of these groups was the intended benefactor. Under H-3407, a private school could choose to accept new students or scholarship students. There was no mandate that private schools join in this choice plan. Corporations or individuals could choose to make contributions in lieu of paying state taxes, and those families that can currently afford private school tuition could choose to take a tax credit against their state tax liability.

The average annual tuition at a private school in South Carolina is $8,720.36 Under H-3407, the total scholarship available to low-income families (the only families that qualify) during the first year is $2,878.00. Who will pay the difference? For families that do not qualify for a scholarship, a tax credit is available in the amount of up to $2,878.00. A tax credit does not result in a tax refund. A tax credit does not put money in your hand.

In South Carolina, there are 149 private schools. Of those, 119 are church related. If a private school that is affiliated with a church accepts a scholarship student, under this bill, that school may not ask that student for a profession of faith, to worship or to pray. We would be asking private church-related schools to create a separate secular curriculum. Do we really want separate but equal again?

 Reason 3: H-3407 may not be constitutional. In Williams v. Illinois, the United States Supreme Court said that “a law nondiscriminatory on its face may be grossly discriminatory in its operation.” As stated here, this bill did not offer choice to the low-income or those in failing schools — it offered choice to those who can afford it.

 Reason 4: One person’s choice should not come at the expense of others. Because this bill would have resulted in a significant reduction in general fund revenue, this so-called choice would have come at the expense of others in the form of less money for other services provided by the state of South Carolina.

I encourage each of you to read H-3407. Please see for yourself the flaws in this bill and why it was bad for South Carolina.

N. Douglas Brannon represents S.C. House District 38.

 

This week marked the regularly scheduled end of the 2011 legislative session, and I am proud to report that the House Republicans achieved every item on the conservative agenda we unveiled back in January.

 

 We created our agenda based on months of discussions with you during the 2010 election. These are the items we heard were at the top of the agenda for conservatives throughout our state. Because there were nearly 20 pieces of legislation, we intended it to be a two-year agenda, but we got all of these items through the House in 19 weeks. Here is a quick recap of our major achievements:

·                     Creating Jobs: The House Republicans passed comprehensive lawsuit abuse reform we believe will create a more business-friendly economic climate and help them create jobs. As the session winds down, we struck a compromise with the Senate on differences between the bills. We are now confident lawsuit abuse reforms will become law this year. We also passed new tax incentives for South Carolinians who are “Angel Investors” to help fund the next great small businesses. That legislation is in a Senate committee.

·                     Roll Call Voting: We approved a major expansion of Roll Call Voting in the General Assembly.  The Senate followed suit, and this measure of transparency is now law after a two-year fight. This bill is already law.

·                     Improving Education: We approved new funding for our state’s charter schools, making it easier for them to be the innovative alternatives we envisioned when we set up the system more than a decade ago. This bill was moving in the Senate late this week.

·                     Transparency and Government Reform: Roll Call Voting was just the beginning. The House approved transparency in how our colleges and universities spend their money. We also worked hard to restructure many agencies in our sometimes inefficient government, and we approved legislation that will shorten our way-too-long legislative session. None of these items made it through the Senate before the end of the session.

·                     Spending Caps: We fought for strict spending caps for the state budget in an effort to even out the peaks and valleys of our budget cycle. The hope is that these caps will prevent government from growing too fast, so during the next economic downturn, the cuts to essential service won’t be as severe. The House has approved a version of the spending caps bill eight times since 1994. None of them have become law.

·                     Limiting Government Power: Limiting government power is essential to freedom and personal liberty, and is also a core Republican philosophy. The Caucus approved the Repeal Amendment, a federal constitutional amendment that will allow two-thirds of states to vote to repeal a federal law. The Caucus revamped the South Carolina Taxpayer Bill of Rights. The House also required the General Assembly approve new regulations by the unelected officials of state agencies. 

·                     New Pro-Life Protections: Protecting our most vulnerable citizens is an essential role of government. We approved the “Born-Alive” legislation and the Freedom of Conscience Act. These bills ended the session in a Senate committee.

·                     Point of Sale Reforms: The House approved some needed tweaks to the Act 388 property tax relief bill that should give a much-needed boost to our state’s commercial real estate market. This bill did not change the base tax relief plan that we approved several years ago. A compromise on this bill was reached late on the final day of session. 

·                     Illegal Immigration: The House and Senate both approved versions of this “Arizona-style” immigration reform that builds on our landmark 2008 legislation. Since that time, independent researchers have estimated the number of illegal immigrants in our state have dropped by nearly 21 percent. A late-May Supreme Court ruling on the issue caused the Senate to work on making last-minute tweaks to the legislation, but we remain confident the Senate will approve the bill and this will become law in June.

The House will return to session on June 14th to begin debate on the Census-required redistricting. But we believe this constitutes a solid record of achievement for the 2011 session.

It is a rare thing in politics when a party receives a true ‘mandate’ from the public, but the 2010 election, where the GOP gained three seats in the House, picked up all nine Constitutional Officers, and now control five of our six Congressional seats, was a mandate from the voters of South Carolina.

We look forward to working with you and the state Senate to make the rest of these conservative agenda items the law here in our state.

As always, thank you for the privilege of serving you in Columbia.  If I can ever be of assistance to you, or if you have ideas on issues you want me to share with the rest of the General Assembly, please don’t hesitate to contact me.

 

Amazon.com is one of our nation’s biggest success stories in business in the past two decades. It was founded at the beginning of the Internet age, survived and thrived during the 1990s tech bubble, and this year jumped from No. 100 to No. 78 on the list of the Forbes 500.

Amazon.com wants to create 2,000 jobs in our state, and the deal brokered by former Governor Mark Sanford has created a stir among South Carolina residents.

The Sanford Administration negotiated a deal with Amazon that included giving the company a “safe harbor” from collecting sales tax on sales to our residents – the same deal we extended to QVC several years ago. The House voted the measure down in April and Amazon announced it was leaving before it created a single job here.

Extending the safe harbor means there is no cost to the state budget.

It is not uncommon for the General Assembly to make some mistakes. What is even more uncommon is for us to fix them. This week the House reversed course and overwhelmingly approved the extension to the safe harbor provision; giving the safe harbor to Amazon.

Some estimates are that Amazon will not have to collect as much as $2 million in sales taxes. In return, South Carolina will gain at least 2,000 jobs – jobs that pay $33,000 with health benefits and retirement. In return, the company will invest at least $125 million in our state. In return, economists believe at least 1,500 other jobs will be created in the Midlands from workers at the Columbia airport, to UPS, to your local grocery store. In return, the state will end up collecting at least $3 million in new income taxes each year.

Before we reversed course this week, many House members did not have all of the facts. This is partly because of the way the deal was negotiated, and because of the fact that most of the General Assembly didn’t know about the deal until ground had already been broken on the facility in Lexington County. Promises were made to Amazon to pass significant legislation with very little contact with the General Assembly beforehand. Most of my Republican colleagues seriously object to the way the deal was brokered, and current Governor Nikki Haley has said such deals will not be made in the future.

But promises were made by the State of South Carolina to Amazon, and if we are to continue to compete for jobs in the future, we must keep our word. CEOs of companies across the world are watching how we deal with this issue. It put the entire House in a difficult spot.

It is obvious that without the safe harbor sales tax protection Amazon will not invest in South Carolina because they have options. The free market was in full swing when state after state began to pick on South Carolina’s carcass hoping to attract Amazon jobs and investment. Other states are waiting in the wings, eager to attack us on a variety of potential economic development deals. They understand full well that Amazon jobs, payroll, and infrastructure investment would have promising reverberations throughout their fragile state economies.

More important, it was evident to them that Amazon will sell tax free into their states, and throughout the country, until Congress seizes the initiative to make uniform changes in Internet tax policy. This is the lesson of three weeks ago.

To be clear, Amazon will continue selling its products to South Carolinians sales tax free because the U.S. Supreme Court gives them that protection. They sell to us now from distribution centers in states around the country and are not required to collect the sales tax. The only question we have to answer today is whether or not Amazon will bring 2,000 jobs and $125 million.

South Carolina’s General Assembly had a rare opportunity to fix our mistake and learn from this lesson. The mistake was to assume Amazon was bluffing and that they would invest in South Carolina even if we denied them what we as a state promised and the U.S. Supreme Court guarantees them.

The House made good on those promises this week, and the legislation now goes back to the Senate, where senators will have to concur or reject the Amazon deal.

There will be a time and a place to reject potentially unfair tax incentive deals. It was not proper to draw a line in the sand when promises had already been made. Our good word was at stake.

As our state works to recover from the recession, we are not in a position to reject more than 2,000 jobs when there is ZERO direct cost to the state budget.

As always, thank you for the privilege of serving you in Columbia. If I can ever be of assistance to you, or if you have ideas on issues you want me to share with the rest of the General Assembly, please don’t hesitate to contact me.

 

Three Conservative Agenda Items Moving

Despite the short week in the House chamber, several major pieces of legislation were moved by the House and the Senate.

This week’s notable achievement is the approval of the House’s Voter ID legislation by the Senate. After two years of debate, we finally got one of the Republican Party’s major platform items to our governor’s desk. Thank you to all the activists who called their senators. Thank you to the senators who were finally able to get this critical piece of legislation through their chamber.

The Voter ID bill requires voters to prove who they are with a state-issued picture ID when they vote. It’s that simple, and polls show it is supported by 4 out of 5 Americans.

In the House, two other major pieces of legislation moved. The first bill provides fixes the Point of Sale reassessment that was part of the property tax relief act from a few years ago.

While the relief act slashed homeowners’ property tax bills by as much as 50 percent, a provision that reassessed property when it was sold has had an unintended negative consequence on our real estate market. Combined with the economic downturn, Point of Sale has had a seriously negative effect on our state economy.

The Point of Sale repeal should do more than change property reassessment. It is also a jobs bill. A recent study by economists hired by the South Carolina Association of Realtors showed that repealing the Point of Sale provision will create up to 35,000 jobs and create a $4.2 billion total impact on economic activity in our state.

An increase of 35,000 jobs would lower our state’s unemployment rate by up to 2 percentage points.

This is the third time we have approved Point of Sale changes .The bill now goes to the Senate.

The second major piece of legislation that moved this week was the illegal immigration bill. The bill has two major parts. The first part requires that if a South Carolina law enforcement officer has reasonable suspicion that a person stopped, detained, or arrested is an illegal immigrant, the officer or his agency must verify the person’s immigration status. The bill also makes it illegal for an illegal immigrant to ask for work or attempt to ask for work.
In 2008, the House led the way in passing the toughest illegal immigration bill in the nation. Since that time, the number of illegal immigrants has fallen in the state, according to several studies. This new bill should make it even more difficult for illegal immigrants to live and work in our state – freeing up jobs for American citizens and legal immigrants. Immigration and the ideal of a better life has made our country great, but it is important that we reward those who take the time to come to the United States legally.

We look forward to getting the illegal immigration bill to Governor Haley’s desk before the end of session.

These are the final two major items on our agenda for the year, but the House Judiciary Committee is still working diligently on the Census-required redistricting.

As always, thank you for the privilege of serving you in Columbia. If I can ever be of assistance to you, or if you have ideas on issues you want me to share with the rest of the General Assembly, please don’t hesitate to contact me

 

Creating Jobs, and More on Voter ID

The top priority of the House Republican Caucus this year is improving the economy and helping the private sector create jobs.

Earlier in the session, the House approved new legislation protecting businesses from frivolous and unfounded lawsuits. (The legislation has still not been passed by the state Senate.) This week, the House opened new avenues of funding for our state’s small businesses by passing new tax credits for “Angel” investors.

Angel investors provide critical funding for start-up companies that can’t secure funding from banks. Typically, these are high-risk, but high-reward businesses. For example, Angel investors provided critical funding for Google when it was just a small website with a couple of employees.

The House bill was one of the final projects former Greenville Rep. Bill Wylie was working on when he passed last fall. My colleagues renamed the bill in his honor.

Small businesses are the backbone of the American economy, and Angel investors provide critical capital to get these businesses off the ground. If we can help fellow South Carolinians get their ideas off the ground, we all win.

Those friends and neighbors – the people who have the next great idea in computer technology or biotechnology – have the potential to create dozens, hundreds, or thousands of jobs. If we keep them here in our state, they will potentially create jobs here. These businesses sometimes need as little as $10,000 or $25,000 to fund operations while they search for markets where they can sell their product.

The bill provides a tax credit for people who provide capital to specific types of small businesses in our state – including manufacturing, warehousing, wholesaling, and technology, among others. It specifically excludes investments in other businesses, such as construction, from claiming the credit. Angel investors can claim up to a $100,000 tax credit over 10 years, and only $5 million can be credited by the state each year to all Angel investors. Half of the states in the United States have similar tax credits for Angel investors – including North Carolina and Georgia.

If this bill entices more people to get involved and help our state’s small entrepreneurs, that is a recipe for more businesses and more jobs here in our state.

This week, unfortunately we continued the Voter ID debate.

This week the Senate voted down the “clean” Voter ID bill – a bill that requires voters to present a government-issued picture ID to prove his or her identity when they go to vote. When the bill went back in front of the Senate this week, the Senate insisted on including the same unrelated provisions that killed Voter ID last year.
Voter ID was only one vote away from becoming law. Given the overwhelming Republican majority in the Senate – and the fact that the Senate Republicans have more than enough votes to end a Democrat filibuster – it was shocking to witness a Senate swayed and influenced so heavily by a minority party bent on killing the bill.

The Senate is taking a stand against a bill supported by 4 out of 5 voters in America; took a stand against a groundswell of grassroots support and against our state’s constitution. An official opinion issued by SC’s Attorney General clearly stated that the Senate’s version of Voter ID is ‘constitutionally suspect’ and gave strong arguments that directly support the House’s clean Voter ID bill.

Voter ID is about securing our elections, pure and simple. It is a major plank in the South Carolina Republican Party platform, and Chairman Karen Floyd came out this week in support of the House version of the bill.

The Republican Caucus hopes that a compromise can be reached on the House’s constitutionally appropriate clean Voter ID bill. If the joint conference committee becomes deadlocked because of an insistence on the Senate’s unconstitutional and unrelated additions, this bill will be put on the same fatal track that killed last year’s bill.

Thank you for the privilege of serving you in Columbia. Your feedback and assistance is critical in ensuring your voice is heard in our state government. If you have ideas on issues you want me to share with the rest of the General Assembly, or if you need assistance in any way, please don’t hesitate to contact me at (864) 4572062

 

The South Carolina House voted to consolidate more of our state’s administrative power in the hands of the Governor this afternoon by approving three major restructuring bills.  Restructuring our state government has been something the House Republicans have struggled with for more than a decade. With the results of November’s elections still fresh in people’s minds, my Republican colleagues hope this is the year these reforms are finally enacted.  These three restructuring bills are yet another piece of our conservative reform agenda that we have approved this year – joining tort reform, the Higher Education Transparency Act, Voter ID, charter school reform, the Repeal Amendment, and roll call voting.

The first piece of legislation approved Wednesday moves fourteen divisions of the Budget and Control Board to a new department: general services, employee insurance programs, the State Information Technology Division, procurement services, veterans’ affairs, Office of Executive Policy, and the state energy office, among others. These offices largely provide administrative or inter-governmental services, rather than providing services directly to the people of South Carolina.  Legislation creating a Department of Administration was approved by the House in 2004, 2008, and 2009.  The Department of Administration will give our Governor more power over the executive branch of government that she heads. This bill is a major first step in strengthening our state’s chief executive.  Whether we enact the next two reforms that we approved this week is entirely up to you – the voter.  The House voted for a constitutional amendment that will give voters the right to decide if the Governor and Lieutenant Governor should run on the same ticket. A second amendment let voters decide if the state Superintendent of Education should be appointed by the governor and not elected.  The few, nearly all Democrat, opponents of these amendments claimed we were taking power away from the people. That could not be further from the truth. In this country, all power is vested in the people, who give that power to the government. In this case, the voters of our state will have the final say, not the General Assembly. If these are approved by the Senate, they will appear on the ballot in November 2012.
Roughly half of the state’s general fund budget pays for K-12 Education, making it important that the state Superintendent of Education has the same agenda as the Governor. Anybody who pays attention to politics knows that education is a key issue in every governor’s race – despite the fact that the governor has virtually no control over our state’s public schools. This needs to be fixed.

The lieutenant governor is currently elected separately from the governor. The person “one heart beat” away from the governor’s mansion could be a different party, or have an entirely different agenda. Given the lack of overall power in the lieutenant governor’s office, it only makes sense that they run as a ticket rather than separately.
The bottom line about the House’s action this week is this: There are good people who disagree about whether our Constitutional Officers should be appointed by the governor – as many of them are in other states – or elected by the people. The legislation supported by the House Republicans this week only gives the ultimate power to decide that question to the people. That’s the right thing to do, and the voters will settle this debate once and for all.
The House Republicans have ushered through similar resolutions on various constitutional officers during every session since 2004. None of them have ever been approved by the state Senate.  There is only one more week before the full House debates the budget, and we have a number of other agenda items on the House calendar – including the Taxpayer Fairness Act and the House Republicans’ seventh attempt at enacting a state spending limit.

As always, thank you for the privilege of serving you in Columbia. If I can ever be of assistance to you, or if you have ideas on issues you want me to share with the rest of the General Assembly, please don’t hesitate to contact me.

 

COLUMBIA, S.C. – The House Ways and Means Committee put the finishing touches on the state’s $5.1 billion General Fund budget Thursday afternoon – finding new efficiencies in state government and increasing the “base student cost” sent to school districts. “There were few good choices this year, but this balanced budget reflects the base conservative value that it is better to cut the size of government than to raise taxes – especially during these economic times,” said House Majority Leader Kenny Bingham. “My colleagues on the committee have worked hard for the last several weeks crafting a budget that prioritizes our true state priorities.” In addition to a 10.5 percent increase in base student cost, the House budget writers also saved taxpayer money by combining many agencies. The Department of Corrections was combined with the Probation, Pardons, and Parole; the Arts Commission and the State Museum were moved to the Department of Parks, Recreation, and Tourism; and Consumer Affairs was given to the Secretary of State. Associated legislation ordering these consolidations is in the House Judiciary Committee. The committee also deleted all general funds for ETV. ETV will now operate on a market‐based approach. And reductions to Higher Education are targeted to reward institutions with favorable graduation rates and higher in‐state enrollment. “I commend the members of the committee for writing the best possible budget document during difficult times,” said Ways and Means Chairman Dan Cooper. “We have worked hard to cut the size of government and not put any additional tax burden on the taxpayers when they can least afford it.”
The proposed budget also includes an additional $10 million to assist the Department of Commerce to recruit new business to South Carolina and $13 million in new job training for our state’s technical colleges. The budget also cuts 4,696 state government jobs that are vacant or have not been filled within the 12 months. Since voters gave the House Republicans control of the state House in 1994, the GOP has slashed the size of government by nearly 22 percent – as measure by the number of state employees. The budget approved Thursday also includes $9.3 billion in Federal funds (93 percent of which goes directly to schools, colleges, or Medicaid) and $7.4 billion in “Other” funds (63 percent of which is paid by parents as tuition to state colleges or paid into health care).
The budget is scheduled to be on the House floor for debate on Monday, March 14th.

 

Fiscal Year 2011/12 budget fact sheet

Prepared by the Ways and Means Commitee
BEA General Fund Revenue Estimate $5.9 billion Current General Fund Appropriations ($5.1 billion) Available Revenue Less the General Reserve Fund $245 million
Key Points: General Fund Reductions are $73.1 million
o That figure does not include increased General Fund funding for the following agencies:
 HHS – $222.5 million
 DDSN – $35.0 million
 Corrections and PPP – $50.5 million
The EFA (primary source of K-12 School Funding) received an additional $101.5 million
o This increased funding raises the Base Student Cost from its current level of $1,617 per student to $1,788 per student.
The Medicaid Program is fully funded per the request of Governor Haley and Director Keck.
o All proviso requests made by the agency were adopted.
The proposed merger of the Department of Corrections and the Department of Probation, Parole and Pardon Services is fully funded.
All General Funds for ETV are deleted. ETV will continue to operate on a market-based approach.
Reductions to Higher Education are targeted to reward institutions with favorable graduation rates and higher in-state enrollment.
A total of $110 million is allocated to one-time, non-recurring projects through the use of the FY 2010/2011 Capital Reserve Fund. Projects include, but are not limited to:
o $10 million in additional funding to Commerce to recruit business and jobs to SC.
o $13 million to the SC Board of Technical Colleges to train workers.
o $5.5 million to work with local tourism officials throughout SC to continue to grow SC tourism

 

The House of Representatives will debate the 20010-2011 budget in a few weeks, but most of the heavy lifting was completed by my colleagues on the Ways and Means Committee this week. Much has been said in the national news over the last few weeks about budget deficits in states across the country. Here in South Carolina, the direction from our voters is clear: Prioritize spending. Protect “core” government services. Cut the size of government. A national poll taken this week illustrates what my constituents have been telling me. The USA Today/Gallup poll showed large majorities of Republican and independent voters do not want tax increases and conservatives support cuts to state government programs. Here in South Carolina we were able to increase the base student cost – the amount per student that we give to local school districts – by 10.5 percent. The House budget writers saved money by combining many agencies and slashing wasted from the Department of Education based on recommendations by our new Republican State Superintendent. The Department of Corrections was combined with the Probation, Pardons, and Parole; the Arts Commission and the State Museum were moved to the Department of Parks, Recreation, and Tourism; and Consumer Affairs was given to the Secretary of State. Associated legislation ordering these consolidations is in the House Judiciary Committee. The committee also deleted all general funds for ETV. ETV will now operate on a market-based approach. And reductions to Higher Education are targeted to reward institutions with favorable graduation rates and higher in-state enrollment. The proposed budget also includes an additional $10 million to assist the Department of Commerce to recruit new business to South Carolina and $13 million in new job training for our state’s technical colleges. The budget also cuts the funding for nearly 4,700 state government jobs that are vacant or have not been filled within the 12 months. Since voters gave the House Republicans control of the state House in 1994, the GOP has slashed the size of government by nearly 22 percent – as measured by the number of state employees.

The budget approved Thursday also includes $9.3 billion in Federal funds (93 percent of which goes directly to schools, colleges, or Medicaid) and $7.4 billion in “Other” funds (63 percent of which is paid by parents as tuition to state colleges or paid into health care). Debating and prioritizing the wisest use of your tax dollars is the single biggest responsibility you place on us as legislators. As a conservative, I start any budget with the premise that we are not spending the government’s money, we are spending your money. The first thing everyone must remember is that the General Assembly is not Congress. We must approve balanced budgets and we have no way to print money to cover shortfalls. We may spend only what comes in from tax revenues. So when our state is facing another major cut in revenue, we must make cuts in spending. Raising taxes to cover higher budget requests is the easy way out, and it was the path chosen by North Carolina and Georgia (along with Democrat bastions such as Illinois, which raised its income tax by 67 percent).

Cutting programs is not always popular. We know that. But in lean times, our conservative philosophy dictates that government should live like a family – you have to tighten your belts and spend less. However, that is not the philosophy shared by all of the members of the House. While the budget cuts might be painful in the short term, they will make South Carolina a better, more stable place to live and work in the long term. The budget is scheduled to be on the House floor for debate on Monday, March 14th.
As always, thank you for the privilege of serving you in Columbia. If I can ever be of assistance to you, or if you have ideas on issues you want me to share with the rest of the General Assembly, please don’t hesitate to contact me