Monday, February 22, 2010

Tax penalties based on average wealth is unfair

Bluffton Today


We had something of a calm spell this week as far as calls and e-mails on local issues are concerned. This is probably for the best as we had a pretty intense week of working over bills in committee, especially those related to jobs and job recruitment.


One bill in particular, H4478, received a lot of attention as it will potentially become an allencompassing job enticement act that will describe how we recruit companies from small engineering shops all the way up the scale to the next Boeing or BMW. As we arrived at Section 16 of the bill, there was language that raised big red flags for me. The cost/ benefit aspect of this bill was based on an area’s “ability to pay” as opposed to more rational or equitable criteria such as average weekly wage.

If this sounds familiar, it is because this same language is found in the Education Finance Act of 1977, which has bedeviled Beaufort County’s financial relationship with the state in paying for public education. The intent of the act was to equalize the burden of school finance among the various counties of the state. It is not unreasonable that more prosperous counties might pay a somewhat larger proportion than poorer counties to support the public schools. Unfortunately, the part of the act called “the Index of Taxpaying Ability” has evolved over the years to the point where we in Beaufort County have found the portion of state dollars returned to us has dwindled to effectively nothing. I have a hard time believing that was the intent of the legislation. Unfortunately, the “ability to pay” criterion is not isolated to education.


Needless to say, your representative took serious exception to Section 16 of H4478. In fact, after 45 minutes of discussion in Ways and Means, it was decided to omit the section completely. I am always a little surprised to have to explain to my legislative colleagues about the wealth distribution in Beaufort County. There are certainly a number of wealthy folks in our county, and they contribute a great deal to the community. However, the overwhelming majority of residents in our area are middle class working families, retirees, and active military. To give us a tax penalty based on an average wealth is simply unfair. If Bill Gates happens to attend the sold-out performance of May River Theater’s “Pal Joey,” then each person in the auditorium would be worth over $100 million on average. That’s an extreme example, but that is often the perception we are facing.


On a positive note, H4478 does include a tax credit for solar electric generation and high efficiency equipment. I will keep an eye on those features and keep working them forward.


The budget gets started this morning and I will be in Columbia five days this week. As we dissect the budget, I always pay attention to how each piece will affect Beaufort County, District 118, and also what might be called the greater good. In all my years of work in the legislature, there has rarely if ever been a sliver of daylight separating those three constituencies.

Monday, February 15, 2010

Hilton Head must win ‘marketing arms race’

Bluffton Today

Thomas Viljack is a friend of mine. He is also a builder and developer who has done a number of interesting projects around Old Town Bluffton. Thomas is also from a military family and is always informed on armed forces issues. Recently, he brought to my attention a matter involving apparent mistreatment by the federal judiciary of a group of Navy Seals. While I rarely get involved in federal issues, this one seemed so patently unfair it must be an exception.

Since our community is privileged to be home to many veterans and active duty service men and women, silence on this matter would be insulting. Consequently, I invited Thomas to Columbia, we wrote a resolution in support of our Navy Seals and placed it before the General Assembly, where it passed unanimously and expeditiously in both the House and Senate and is on the way to Washington. I have personally sent copies to Congressman Wilson as well as Sens. Graham and DeMint.


There is currently a misperception that your representative is trying to raise your taxes, specifically the sales tax, from 7 percent to 8 percent. This is not true. I am not trying to raise your taxes. I cannot state it more plainly than that.


What I have done is this: I have entered a bill on behalf of the town of Hilton Head Island and the Hilton Head Island/Bluffton Chamber of Commerce to allow Hilton Head to have a local option sales tax. What does this mean? If the measure passes the Legislature and is signed by the governor, then Hilton Head may hold a referendum to decide whether the voters wish to impose upon themselves an additional penny sales tax in addition to the 7 percent already levied.


The reason the town and the chamber have asked for this local option sales tax has to do with the fact that the future prosperity of Hilton Head and surrounding communities is tied to the number and quality of visitors to our part of the Lowcountry.


For years, competing resort areas have dedicated marketing dollars at levels that literally dwarf what the local chamber can raise and spend. The fact that the Hilton Head area has managed to maintain its market share is largely a testament to the excellence of the product we have, and to the extraordinary effectiveness of the Hilton Head Island/ Bluffton Chamber of Commerce. Bill Miles and his cadre have done great things with comparatively modest resources. It is no surprise that they are perennially rated either the top chamber in the country or among the top three in the country.


However, all of our principal competitors have raised the stakes with massive infusions of marketing resources. There is something of a marketing arms race among destinations around the world. This comes at a time of vulnerability for us as our flagship promotional event, the Heritage, is facing sponsorship questions. Also, many of the resort communities on the island are maturing into buildout and are therefore marketing less aggressively.

Considering these challenges, it is not surprising that those entrusted with the future prosperity of the Hilton Head area would look seriously at whatever might be added to their defensive arsenal. A local option sales tax is one possible weapon.

Consistent with the tenets of home rule, this tax will be only happen with the consent of the governed. I’ll have more on this as it develops.

Monday, February 8, 2010

Increased need, decreasing money adds up to nothing but worry

Bluffton Today

It was another tough week for the budget as South Carolina tries to recover.

The Board of Economic Advisors (BEA) has forecast another quarter of stagnation, which means the cuts we originally made and the latest cuts we are so carefully trying to scalpel in are not going to balance the ledger. We now must look at essential agencies of the state and the invaluable people that make them function, and find ways for these folks to carry on with less funding. On paper, it looks fairly simple. In reality, each of these decisions has consequences in the lives of real people, many of whom don’t have alot of options left.

One of the local service providers I am trying to help weather the storm is Hope Haven, the rape crisis center in Beaufort County. I have been on the phone with my friend, Jeannie Owens, volunteer coordinator at Hope Haven, as well as board member Kim Statler.


They are seeing a huge increase in their directly provided services and are exploring every avenue to remain fully operational. You may not know much about Hope Haven, but sometimes they provide the only personal contact arape victim has as they navigate the whole medical and legal process following the assault. You can be sure I will go to the mat for these good people.

Part of the downward spiral we are confronting is that social service providers are being cut right at the moment they are seeing a dramatically increased need. Sustained high unemployment leads to more problems with alcohol and drug abuse, which has behavioral consequences across the board. One of those behavioral consequences is violence against women, including rape. Witness the huge jump in calls to Hope Haven.

This illustrates one of the reasons I am so determined to attract and protect jobs in our area. This is not about ideology or any abstract notion of economics. It is based on the hard fact that adecent level of employment makes for stronger families, stronger neighborhoods and fewer calls to law enforcement and to frontline social service providers.

In many ways, we in Beaufort County are fortunate in that our economy has astrong tourism component. While the number and duration of visits to Beaufort County is down, and our building trades are really hurting, there are many communities in our region that are simply flat-lining.

Finally, we got 460-plus calls and emails last week, mostly on the Sembler matter. Interestingly, only two of those calls had to do with my “butt kickin’” by the editorial board of “the other paper.”

Of the two, one was a lady from Hilton Head wanting incentives for the mall in her neighborhood, and the other was from a retired legislator offering to write an op-ed protesting the fairness of the editorial. I passed on both.

For more information on my position, go to my Web site, www.Herbkersman.com, and read my last few columns.

Monday, February 1, 2010

After research, Sembler’s mall plans look pretty good

Bluffton Today

Last week, in this space, I promised to offer a definitive stance on the incentive package for the 280-acre commercial project located on the Beaufort and Jasper county line off S.C. 170, currently being readied for development by the Sembler Co.


There is a division in our community regarding whether this large mall development is appropriate for its proposed location, whether it is too close to the already impaired Okatie River, and, finally, whether it is proper to offer state economic development incentives for a retail development as opposed to an industrial concern such as Boeing or BMW.


In truth, I have struggled with some aspects of this matter, in that it seemed to place into conflict my two bedrock political priorities: a clean, healthy environment and jobs to support Lowcountry families.


In my column Jan. 18, I wrote about the “competing narratives” concerning the so-called “megamall.” I also reported that last April I voted to expand the criteria for economic development incentives, opening the door for the Sembler tax rebates now under scrutiny.

In fact, I sponsored the amendment that created the expansion of what was an acceptable project for state support.

Admittedly, I voted, along with a majority of our delegation, for a jobs bill without being fully aware of some of the particulars that would flow from our actions. I was fully aware, however, that we were in a serious recession with a real unemployment rate of around 15 to 18 percent, and jobs were high on my priority list.

In the Jan. 18 column, it was made clear that I was “gravely concerned” about 280 acres of rooftops and parking lots creating runoff potentially flowing to the Okatie. I still am.


However, while these are all important concerns, I have also been doing my homework. I have digested the Sembler stormwater plan, as well as consulted with a variety of independent engineers. The consensus is that the developer has come up with a very good, forward-looking plan that does not further burden the Okatie.


Furthermore, I have personal assurances from Sembler management that the plan will be executed and tweaked where necessary. They have also committed to abide by the rigorous Beaufort County stormwater ordinance. If they fall short of the mark, I promise that the state will engage them with serious and aggressive oversight.


With a certain comfort level on the environmental side, I am heartened by the number of jobs we will likely see in a matter of months, as the site prep and infrastructure work begins in earnest. This will be followed by the operational jobs that will increase with the completion of each additional phase. Since the incentives are tied to employment numbers, I am pretty confident that Sembler will make a diligent effort to get up to speed sooner rather than later.

Finally, after having visited a flagship Sembler property in Florida, I see the potential for positive and even transformational growth in an area that has historically been left behind. While there may still be questions about whether economic incentives for this kind of job creation are appropriate, in my view repatriating your state tax dollars to our area not only creates these needed jobs, but also a regional amenity, and is essentially our own, homegrown stimulus package.


Friends, I am convinced that this is a good deal for all concerned.


Having said that, your representative will still follow the Reagan mantra: Trust but verify.