This year’s meeting of the Southern Legislative Conference(SLC) will bring around 2000 state lawmakers from 15 Southern states to Charleston for a 64th annual conference to be held Saturday through Wednesday. Charleston was chosen because South Carolina House Speaker Bobby Harrell was elected to chair the conference.

Harrell projects that the conference’s economic impact on the state to be more than $3.5 million. And he says it will be a nice tourism boost.

AUDIO: Harrell on SLC (2:55)

Attendants will hear some high-powered speakers, including Federal Reserve Chairman Ben Bernanke, who grew up in Dillon, South Carolina, as well as U.S. Senator Lindsey Graham and U.S. House Majority Whip James Clyburn, all speaking about issues that affect Southern states. Music will be provided by Darius Rucker, a country music recording artist from Hootie and the Blowfish fame.

Events will be held all around the historic city, including Charles Towne Landing and the South Carolina Aquarium.

Harrell says no state general funds were appropriated in the budget to host the SLC meeting. He says private sector donations are being used, even though host states have generally appropriated hundreds of thousands of dollars to support the event, because of its legislative role and large economic impact.  Harrell said:

Because of recent budget cuts, we felt it important to dedicate taxpayer dollars to the core government services and independently raise the funds. I want to thank the many generous members of our business community for all they have done to ensure that South Carolina and all that our state has to offer is properly displayed during the conference.

The Legislative Audit Council has agreed to review the state’s participation in the National Heritage Corridor. State Representative Bakari Sellers of Denmark made the request for the review along with several other lawmakers whose districts lie within the boundaries of the corridor. Sellers says he and the other lawmakers want to know if the funds allocated for the program are being used in all areas of the region.

The program was created to boost tourism in rural areas. Designated by Congress in 1996,  the S.C. National Heritage Corridor is a 240-mile path running through 17 counties from Oconee County in the northwest down the western border to Charleston. The corridor is divided into four regions.

Nationally, the National Heritage Areas received total federal appropriations of $18 million. Originally, each area received $1 million, but as more areas were added, it cut into the individual appropriations each area got because the total budget was not expanded for the growth. There are currently 49 National Heritage Areas in 32 states nationwide.

Sellers says he wants to know if the federal dollars allocated for the program are being used effectively. Sellers says if the review shows effective use of the funds, it may persuade the state to invest revenue in the program to enhance tourism in those areas many say are off the beaten path. That could prove important because the U.S. Government’s 2010-11 budget included language to eliminate 22 National Heritage areas. The S.C. National Heritage Corridor is seeking partnerships, either through private companies or other government agencies.

Sellers says state Representatives Tom Young, Gilda Cobb-Hunter, Bill Clyburn, Jerry Govan, and John Matthews signed his letter officially asking the LAC to review the program.

AUDIO: Rep. Bakari Sellers on LAC audit request 1:43

Sellers says no timetable has been set for the review.

An appointed commission to review the state’s tax structure took its first vote today.

Burnie Maybank, former SC Department of Revenue director, chairs the commission

Realtor Don Weaver serves on the South Carolina Tax Realignment Commission, which was appointed by the legislature to review and make recommendations about the way the state taxes its citizens. Wednesday, the committee of  people well-versed in taxes and finances approved what amounts to a first reading to a report on sales and usage taxes. New taxes might be seen on groceries, utilities and drugs.

This was our first vote to accept a subcommittee report, which is progress because we’ve really just heard testimony up until this point. And I think you heard from several of the TRAC members some concerns that this be revenue-neutral.

Revenue neutral, in this application, means that more items may be taxed, but at a lower rate–which spreads out the tax base. Why is that better? Commission Chairman Burnie Maybank says,

In terms of the individual consumer, I’m sure some will pay more and some will pay less. In terms of the overall bill, the bill is designed to be revenue-neutral. SO as it repeals exemptions, it lowers the sales tax rate by a comparable amount.

Under the TRAC draft proposal, the average consumer will have groceries taxed, pay more sales tax on cars, and pay more on Internet product downloads. But Maybank says that there are other items, like appliances or electronics, that will have a lower tax rate. He says that the new tax structure would more truly reflect consumer spending habits.

But, he also admits that with an improving economy, the motivation and impetus pushing the state tax overall may be diminishing. “There’s probably a little more momentum behind this than most, though,” says Maybank.

Also at today’s meeting, local governments and education lobbyists once again asked that legislators look at the controverisal Act 388, which cut proterty tax and added sales tax statewide, but the TRAC commission is not allowed to consider revamping that law. A national education association economist told the TRAC commission that relying on sales taxes to pay the bills permanently damages the economy of rural communities.

Review latest sales and usage tax draft from SC TRAC

Treasurer Converse Chellis is beginning a five-month study on the implementation of zero-based budgeting for all state departments and agencies, as put forth by the General Assembly during its last session.

Scott Malyerck with the treasurer’s office describes zero-based budgeting as a method of budgeting in which all expenses must be justified for each new period. Zero-based budgeting starts from a “zero base” and every function within an organization is analyzed for its needs and costs. Budgets are then built around what is needed for the upcoming period, regardless of whether the budget is higher or lower than the previous one.

Chellis has been a proponent of zero-based budgeting and believes, if implemented correctly, it will cut down on inefficiency and waste in government.

AUDIO: Chellis on zero-based budget (1:41)

The Treasurer’s Office will examine how other states have implemented zero-based budgeting and also meet with state agency heads and fiscal officers at institutions of higher learning.

Chellis has been a supporter of the zero-based concept for years, but he says he really doesn’t have any preconceptions on what the study will produce.  Chellis says he wants an objective study.  At the same time, he says he hopes to save the state millions of dollars. 

It’s time to hold every agency in state government accountable for every dollar it spends. With the implementation of zero-based budgeting, agencies and departments will have to justify every tax dollar they spend each and every year. We’ve seen how agencies have incrementally increased their budgets. Zero-based budgeting will require justification of every dollar that is spent. During these remarkably tough economic times, having government examine and explain how it spends money each and every year is just common sense.

The Treasurer will make his recommendation on whether to implement zero-based budgeting to state lawmakers before the beginning of its 2011 session.

In 2009 when Boeing announced that it was locating an assembly plant in South Carolina, it was clear that the corporation would bring 12,000 jobs to South Carolina over the next three years.  Boeing announced Thursday that it will locate its new 787 Dreamliner interiors fabrication facility at a North Charleston site 10 miles from the main plant.  The main plant is set for completion in the Spring of 2011 and that means thousands of workers will be headed to and from that area on a daily basis.  South Carolina Department of Transportation Director Buck Limehouse says that offers a great challenge, to get the roads ready for that kind of traffic flow.

Limehouse says part of the challenge during this economic climate is finding the funds to improve the roads for the new industry.   So far the only funds allocated for road projects in the plant area is $5 million from Charleston County set aside out of their half-cent sales tax, specifically to improve a number of intersections near the plant site.  Limehouse says with the commitment that the state has made to Boeing he is confident that a workable funding formula will be created for infrastructure improvements.

AUDIO: SCDOT Chmn. Buck Limehouse on Boeing and road improvements 2:04

State Treasurer Converse Chellis says the Budget and Control Board could be shut down within months if something is not done by the governor or state lawmakers.

Chellis says Governor Mark Sanford vetoed raw expenses that support the entire governmental process. That included the state’s accounting system, which is currently being switched over to a leased system, which will bring all state accounting under one system.  Chellis says when the Budget and Control Board’s budget was cut more than $25 million, the funding for the agency’s new leased accounting system was cut out.

AUDIO: Chellis on B & C Board (1:22)

Chellis says it’s now up to the Governor’s office to figure out continued funding of the state’s accounting system.

Chellis says it concerns him that the funds currently being used to pay salaries at the agency come from trust fund monies. He says that could affect the way that financial rating agencies on Wall Street score the state.  Chellis says he has supported Governor Sanford’s push to move the state’s administrative functions over to the governor’s office and disassemble the Budget and Control Board. But Chellis says he does appreciate the fact that the agency has given the state a financial stability which has helped its credit rating.

AUDIO: Chellis on B & C Board- credit rating (1:25)

Chellis says the state could potentially lose its excellent credit rating, just as someone buying a car could mess up their credit rating.

AUDIO: Chellis gives an example (:38)

The state’s Department of Juvenile Justice (DJJ) is cutting 14 school positions to deal with a 38 percent drop in state funding over two years. The agency will also close another wilderness camp, this one in Jonesville for male teens, at the end of this month. This will be the second to close in two years, leaving 11 camps open. Most employees will be required to take seven days of unpaid furlough.

But DJJ Director Bill Byars said the impact could have been much worst. The agency’s final budget impact has been reduced by nine percent thanks to one-time federal stimulus funding.

Byars says this year has been much easier than it could have been, because the agency took the brunt of its cuts last year, laying off 285 employees and closing two dorms in Columbia and several group homes.  He says his agency’s leadership reduced the budget pain this year considerably by spreading out the cuts over two years.

AUDIO: Byars on budget cuts (1:08)

Byars notes that an early version of the 2010-11 state budget would have required closing half of the residential wilderness camps for students.

Byars says the executive staff will take a 10-day furlough, and some administrators like Byars will take a 14-day cut.

AUDIO: Byars on budget cuts (1:07)

The agency will also put male and female students in the same classroom building and close a second school building.

(On Monday, SCRN will feature the second part of this story, where Byars will discuss programs that have made a difference at his agency, so much so that juvenile crime is actually going down.)

A South Carolina law that took effect Thursday will take on illegal immigration – by requiring small businesses to check each worker’s immigration status. That is the last step in measures enacted by the legislature–and it may be the most critical step so far, says Jim Knight ,who oversees the program for state Labor, Licensing and Regulation. He says his agency gets more complaints about that sector.

Knight expects his office to be busy auditing small businesses, but he says the law is easy to understand and compliance should be easy as well:

AUDIO: LLR’s Jim Knight explains new law for small businesses (4:52)

About 23 investigators will check small businesses throughout the state, targeting the areas that get the most complaints, including landscaping, janitorial and manufacturing.  To get help and more information, go to www.llronline.com/immigration.

Charleston Representative Chip Limehouse handles the funding for indigent defense in the House Ways and Means Committee. He says he was curious how South Carolina Democratic Senate candidate Alvin Greene was able to receive indigent defense for his charge of showing pornography to a University of South Carolina student. Earlier this month Limehouse sent a letter asking for a SLED investigation on the possibility that Greene may owe the government money if he did not require a public defender.

“He filed in March and he got his indigent defense money in November. Maybe the $10,000 materialized between November and March. I don’t know, maybe he saved it. But, that was my thought was how was he qualified for indigent defense if he has $10,000 in the bank.

Limehouse says he just wants to know one thing: “I like to see where the money came from. I wouldn’t think it would be good if someone just handed him the money. I think you are suppose to report when you are in a federal race there are some federal reporting guidelines you have to go through. I don’t think someone can just hand you a wad of cash and say go file, so that may be a problem for him right there.

SLED’s investigation on Alvin Greene’s $10,000 filing fee continues.

Wednesday morning, the state Budget and Control Board is meeting and the outcome will be closely watched by legislators concerned about how its agency will be funded.

Senator Glenn McConnell and Finance Chair Hugh Leatherman mused on the Senate floor Tuesday about how the agency came up with $1.4 billion in cash reserves, and roughly $70 million in unrestricted cash now sitting in their bank accounts– according to a statement by the governor this week.  Sustained vetoes had supposedly crippled the agency’s operational funds.

AUDIO: McConnell and Leatherman on B&CB funds (2:02)

The funding under discussion is for the 1100-employee agency that  helps to manage and audit other state agencies. Read more about the history of this agency, unique to SC.

Governor Mark Sanford signed The Economic Development Competitiveness Act in Greenville Wednesday. Sanford says the bill is a step forward in making the state more attractive to new industry.

AUDIO: Sanford on Competitiveness Act (:20)

The plan was developed using recommendations from an the Economic Development Group formed by House Speaker Bobby Harrell.  Harrell joined the governor in signing the bill.

 Press Release from SC House:

Office of the Speaker

SOUTH CAROLINA HOUSE OF REPRESENTATIVES

Competitiveness Act Signed into Law

Proactive job growth strategy created by private sector input

(Columbia, SC) – An innovative and proactive job growth strategy was made law earlier today. The Economic Development Competitiveness Act of 2010 (H. 4478) represents a key step in making South Carolina more attractive to new industry and helping our state’s existing businesses grow. The plan was developed by recommendations from an Economic Development Group of private sector industry leaders House Speaker Bobby Harrell created this past summer.

With Growing South Carolina’s Economy its number one agenda item for the session, the House of Representatives made significant progress this year by passing the Competitiveness Act, reforming our state’s broken employment agency and advancing Business Tort Reform.

Speaker Harrell issued the following statement about the Competitiveness Act becoming law:

“South Carolina’s economy is the biggest issue facing our state for the next two decades. We made job growth and economic development a top priority this year because our state’s future hinges on the strength of our economy and the private sector’s ability to grow and create jobs.

“We’ve worked very hard over the years to create a low-tax, pro-business climate in our state. The Competitiveness Act takes the next step by incorporating the direct needs of the private sector and implementing a proactive job creation strategy that promotes our favorable economic climate to business and industry around the world.

“This outside prospective on job creation was created by private sector input, because it’s the private sector – not government – that must lead us out of these difficult economic times. Listening to our citizens’ top concerns and recommendations from the private sector, they told us exactly what potential industries and existing businesses need to locate, grow and expand in South Carolina.

“The Competitiveness Act’s passage into law shows that lawmakers are responding to the needs of the private sector and that we want their business here.”

The most watched race on South Carolina’s coast has elected Tim Scott as the First Congressional District GOP nominee for November. It was a celebration in North Charleston as Scott was surrounded by his supporters after a clear victory in the run-off. Scott defeated Paul Thurmond with 68 percent of the vote. In the primary, he led the other eight candidates but didn’t receive quite enough votes to skip the run-off.

Thurmond, who didn’t have much to say, did say he’s never lost an election before, and now he knows what it feels like. He told the people of the First Congressional District to remember why they voted for Scott and to stand behind him in November. Thurmond says he will support Scott 100 percent. The First Congressional District Seat, being left by Congressman Henry Brown, covers Charleston, Dorchester, Berkeley, Horry and Georgetown counties.

Scott faces Democrat Ben Frasier in November.