The state took another step in reforming the state’s employment agency as Gov. Mark Sanford Thursday signed a new law to rebuild the unemployment trust fund. The governor, complete with charts on display to make his points, says this moves the state away from an arbitrary, fixed rate system for businesses to pay in and closer to an insurance-type system where the rates are set.
For too long, the Employment Security Commission (ESC) was a separate island of government with little accountability – and that lack of accountability had real world consequences. Although we addressed those structural problems earlier this year, we’re still faced with the reality that South Carolina has had to borrow almost $1 billion from the federal government to cover the Unemployment Insurance Trust Fund’s shortfall. This bill begins the extended process of repaying our state’s debts and being good stewards of this UI Fund going forward by both making abuses of the state’s UI system significantly more difficult and protecting employers who don’t abuse the system.
Lexington Representative Kenny Bingham and Aiken Senator Greg Ryberg were given credit for pushing this bill through the General Assembly.
“I am pleased that the General Assembly reached bipartisan agreement on the complex reform of the unemployment insurance system,” Ryberg says, “Any further delay only promised to increase even more the cost to South Carolina businesses. Kicking this can down the road was not an option.”
Bingham says that two years ago in subcommittee, it only took him 30 seconds of reviewing the records of the Employment Security Commission to subcommittee “to realize we had a major problem.”
At that time the fund was being drained because ofthe economy and how the funds were being shuffled inside the commission. State officers and legislators raised questions of accountability that were not answered. This resulted in the ESC being overhauled and renamed, commissioners fired and an interim director being chosen. Interim director John Finan says he is delighted to have the new law to help get the fund “back on the road toward solvency.”
The fact that it has bipartisan support means we’re getting a lot of support. We’re going through this in great detail now looking at all the aspects of the legislation. One thing I did note is that it brings our tax rates both at the lower level and at the higher level more into line with our neighboring states and that’s got to be good for business.
State Commerce Director Joe Taylor says the research that led to the law will be now a model that may be the best in the country in promoting employment. It will officially go into effect in January 2011.