Rate relief for businesses is now in the hands of the state Senate. A Senate panel, with the exhaustive help of the Department of Employment and Workforce, basically set up talking points for the Senate to begin restructuring how companies will help the state pay back the federal government for unemployment extensions granted in the past two years.
The state has a current loan balance of $866.6 million, with interest accruing. A 2010 law set up a steep increase in unemployment insurance fees for some employers, who have been clamoring for a legislative remedy since the session began.
The state took action to repay the federal government earlier than neighboring states, leading some business lobbyists to accuse the state of rushing the process, “But, we borrowed earlier than some of these states, too, ” says Erica Von Nessen of the SC DEW, who has been working out the tables and scenarios herself.
Corporate interests who attended last week’s Labor, Commerce and Industry committee meeting urged senators to find a solution quickly. Debbie Croft with Bosch Corporation says “I don’t think any of us could say we were pleased with the specifics,” in the panel’s discussion.
“The real pressure is the time, the first payment is due April 30. For larger companies, we can’t just sit down at our desk and write a check.,” says Croft
For some, payments will increase $1,100 per employee. Sen. Thomas Alexander of Oconee says he is concerned the Senate will not get to the bill in time. Tort reform debate is stalling action on other major bills and this item has not been expedited on the Senate calendar.
Alexander says getting the bill to the full Senate is a significant step. Though the panel studied 26 different scenarios to fix the problem, that agreed on none. He commends the subcommittee for the time and efforts that they put in and it is not unusual for a complex issue to be sent to the floor:
It just continues to be a work in progress and I think that demonstrates the significance of the impact it will have on this economy in South Carolina and that ultimately will impact all South Carolinians.
Henry Harrison, Chairman and CEO of American Services a security and janitorial staffing service out of Greenville for 36 years. He says if there is no relief to this payment schedule that he will shut his doors, putting 3,000 people out of work.
The committee offered no solution at this point, though LCI subcommittee chair Kevin Bryant proposed a 20 percent cut for unemployment benefits starting in 2012.
Bryant quoted from Barry Goldwater’s Conscience of a Conservative and likened unemployment to welfare, saying his personal belief is that the state is encouraging dependence on benefits and less desirous of work. He cited a conversation he had with a constituent he says wanted to keep drawing benefits instead of working.
Sumter’s Phil Leventis disagreed, saying the quote was out of context: “When you have an industrial society, you have unemployment. There was no unemployment on the farm. There was always something to do.”
“I am not going to shape the system based on a few lazy, no good folks.
This led to a volley between other senators on the panel about the benefits and ills of providing unemployment insurance.
For some relief in the meantime, there is also a monthly payment plan set up for companies, with 1 percent interest, set up by the SC Department and Workforce.