In the wake of what South Carolina House Speaker Bobby Harrell calls a scathing report by the Legislative Audit Council, the restructuring of the Employment Security Commission remains a front burner issue for state lawmakers. Appearing on an SCETV House teleconference earlier this week Harrell, Orangeburg Democrat Gilda Cobb-Hunter, and Lexington Republican Kenny Bingham outlined the goals of a successful restructuring of the ESC. Bingham, Chairman of the House ESC Ad Hoc Subcommittee says greater accountability is foremost, pointing out that agency heads did not alert the Governor nor the Legislature that the Unemployment Insurance (UI) Trust Fund was in danger of becoming insolvent and ultimately fell into a deficit situation.
“We’ve gone from $8 million, from a positive balance just eight years ago to we are now today sitting at a little over $7 million in deficit. We’re probably going to reach in the neighborhood of $1.7 billion before the economy turns around and we can start making positive gains back out of this hole that we’re in. We’ve got a huge gap we’ve got to make up so the UI trust fund and how we set our tax structure is going to effect our state’s opportunity to recruit and retain businesses and quite frankly every business that currently exist in the state.”
As a consequence of UI trust fund becoming insolvent, the state has been forced to borrow $700 million from the federal government to pay off jobless claims, and more loans likely will be required.
Rep. Cobb-Hunter says a change in the tax structure must reflect a fairer formula for each business to contribute their share of the burden in contributing to the UI Trust Fund. She says, “Based on the Legislative Audit Council report, we have a system where business that rarely lay off employees or rarely use the system are being penalized disproportionately for those businesses that routinely layoff workers and that’s not fair for businesses that do not lay off workers to pay for business that do.”
House Speaker Harrell says a restructured ESC must place a greater emphasis on putting people back to work and the most effective way of doing that is to make the agency a part of the governor’s cabinet.
“The Employment Security Commission needs to change from a check writing agency predominantly to a job placement agency predominantly for those folks that are out of work. We also need to have the Employment Security Commission working more closely with the Department of Commerce because Commerce’s job is to go get jobs and bring them here (to South Carolina) and the ESC can alert the Commerce Department what kinds of workers need jobs within the state right now. We need those agencies working more closely together and putting the ESC in the Governor’s cabinet will help that.”
Cobb-Hunter says it must be made clear that the ESC cannot needlessly grant unemployment benefits to persons who have been fired for cause or leave a job voluntarily. “I am very much pro-worker, but I am just amazed that we could have paid out all of the thousand of dollars that we paid to workers who were fired for cause for reasons like drug use, stealing, absenteeism. To allow these people to receive benefits is unimaginable.”
The LAC report showed that $171 million in benefits were paid to workers who were dismissed from jobs for cause or left their jobs voluntarily. Wednesday a Senate Labor, Commerce and Industry subcommittee approved a resolution that says workers found to be drinking, using drugs, sleeping, stealing or damaging employer property would not get benefits.
Bingham says while momentum has picked up for ESC restructuring several bills will be needed to make the changes necessary to make the agency more effective and accountable. “It need to be a cabinet agency like it is formulated in every state basically in the country and we need to deal with the tax structures. Bingham says the services provided by the agency in terms of job placement must also be upgraded. “We need to deal with the concerns of providing more workforce training by improving the flow of communication and the delivery of those services, and that includes our one-stops (regional job service offices) making sure they are as closely aligned as possible so they all deliver the same services. At this time we have a great disparity across the state some one stops are working very well some not as well.”