Wednesday, January 22, 2014

From the House

Bluffton Today

The first week of session was trying, especially on Ways and Means. Each year, we begin with a forecast from our Board of Economic Advisors (BEA) that gives us a pretty good idea of what we can expect our revenues to be for the foreseeable future. This general number is revised from time to time as we go through the budgeting process. If the number is trending upward, we can look to doing a few more things on our wish list, such as building our reserves or allocating to our infrastructure investment. If it is trending in the other direction, there is sometimes painful belt-tightening. This is the beginning of a very numbers-dense, highly detailed, but utterly essential asset allocation process.


My late brother Tom was a very smart man, and a CPA. He loved numbers, but was used to dealing with folks who didn’t share that affection. He used to say that without some way to organize numbers, it’s likely to become mind-boggling, especially in a large, complex document, like our state budget. So instead of just reciting groups of revenue and different groups of expenditures, for the next two or more columns, we will use a kind of simplified thought diagram to avoid being overwhelmed.


Imagine, if you will, that our state is one big community, something like a big sub-division, with the state government acting like a Property Owners Association (POA). The POA collects dues from the residents and hires the people who keep up the roads, teach the children, police the common areas, and generally administer the things we hold in common. Also, since we are a community among other communities (other states), we have another entity to take care of the roads and bridges that connect the communities to one another, to deal with disputes between the communities, as well as protect us from those outsiders who might wish us ill. This can be thought of as the federal government. We pay dues to them to handle those things beyond the scope of our individual communities.


Our community (South Carolina) has decided that our dues will be mostly in the form of individual income tax, a tax on businesses and corporations, or by charging a surcharge on many of the things we buy, in other words, a sales tax. The BEA tells us that we are probably going to have a little over $7 billion in community income this year. Around 90% of that total is from the aforementioned individual and corporate taxes, and sales taxes. The breakdown is around $3.4 billion individual income tax, $386 million corporate tax, and $2.5 billion in sales tax.


Where it starts to get complicated is when we realize that our income varies from year to year, as we are at the mercy of macroeconomic forces that tend to diminish all our income sources at the same time, as well as increase our expenditures, while we cannot constitutionally run a deficit. Thus, our budgeting is like balancing estimates of estimates. Also, our bills don’t all come due at the end of each month, with some being brought over from previous years and some extending into the out years.


Our best answer to this built-in uncertainty is adequate reserves, whether it is the Capital Reserve Fund, General Reserve Fund, Property Tax Trust Fund, or any number of contingency funds we hold. Like most of you, we try to smooth out this fiscal uncertainty by paying ourselves first. For you, it’s IRAs or 401Ks, for us, reserve funds.


Next week, we take a look at the other side of the ledger.
Finally, please don’t forget the CODA Race4Love on 15 February in Beaufort. Go to http://race4love.com for more info. They deserve your support.

Wednesday, January 15, 2014

From the House

Bluffton Today

As we kick off the session this week, there are a number of issues that need attention, along with the usual housekeeping matters. One of the most important has to do with water usage. Water, whether salt, brackish, or fresh, has been on our radar for many years. We were fortunate to have leaders such as Dean Moss, the recently retired head of the Beaufort Jasper Water and Sewer Authority. Dean was so efficient in his work that I think many of us did not properly appreciate how thorny water usage, and the delivery of an abundant supply of fresh water has become. We have been negotiating with our neighboring states for over a generation about aquifer and surface water access.


Estuarine water resources, those fingers of the ocean that make up half of our county at high tide, have been declining in quality as our portion of the Lowcountry has attracted more development. Because of this decline, the last working oyster factory in the state is in Bluffton, on the May River, ably managed by Town Councilman Larry and Tina Toomer. Passionate protectors of our waters over the years have included Nancy Schilling, founder of Friends of the Rivers, Dave Harter, head of the Hilton Head Sportfishing Club, the late Bill Marscher, and the very-much-alive Jimmy McIntire, a tenacious bulldog on water issues.


The most recent dustup involves the Edisto River, which flows through the heart of the state, culminating as the main contributor of fresh water to the ACE Basin. The Edisto is the longest and most important blackwater river in North America. If any of you have kayaked or canoed the Edisto, you know what a treasure this waterway is.


According to my good friend, Rep. Bill Taylor (R-Aiken), the issue turns on a massive proposed withdrawal from the headwaters of the Edisto, for the purpose of irrigating the largest potato farm in the state, owned by a Michigan concern, Walther Farms. DHEC has permitted the company to withdraw between 6 and 9.6 billion gallons of water from the river each year. Residents say the river is just a trickle most summers.


I imagine we will be giving our “River Law,” eight years in the making, another look this session. As there are more and more of us competing for use of our water resources, whether for recreation, industry, or agriculture, there will be more of these conflicts. Unfortunately, this is not just a South Carolina problem, it is worldwide. You, of course, will hear about our version as the matter progresses.


Recently, I received an email from the good folks over at Citizens Against Domestic Violence (CODA). They wanted to make certain that I was aware that two bills had been prefiled by my friend, Rep. Gilda Cobb-Hunter (D-Orangeburg). The bills essentially close two loopholes in the state code dealing with domestic violence. As of this writing, I have a call in to Gilda and I have passed the email along to my friend and colleague, Rep.Weston Newton (R- Bluffton) who sits on Judiciary Committee, which will handle these bills.


It is no secret that our state, for whatever reasons, is over represented in the number of domestic violence cases finding their way to our courts, compared to other states, both in our region and the country at large. CODA serves victims of domestic abuse in our four county area with excellent services and support. They are putting on a run/walk fundraiser in a few weeks. If you are a runner or walker, or simply want to aid in this good work, go to http://race4love.com for info on this walk/run for an excellent cause. The event is February 15 in Beaufort. Hope to see you there.

Wednesday, January 8, 2014

From the House

Bluffton Today

As you read this, it is less than a week before “show time” at the statehouse. Our constitutionally mandated season is from the second Tuesday in January until the first Thursday in June. Officially, that is what your “part-time” representative is obligated to serve. The reasoning, when this was formulated, was to involve as many people as possible in the governmental process. It theoretically opened the door for a broader range of participation than was previously the case.


Unfortunately, we have been in “catch up” mode for the entire 12 years of my service. This is not because we did not have good or effective representation before my tenure. On the contrary, we had a number of very dedicated public servants, but our portion of the Lowcountry was considered something of a backwater, as well as not convenient to Columbia. There was a giant lag between the time when Beaufort County became a fast-growing and economically important part of our state, and when that realization dawned upon the political establishment. Fortunately, the time when our delegation was not taken with appropriate seriousness is long past.


In fact, with redistricting, the Beaufort/Jasper delegation is finding a role as a balancing force between the traditional Lowcountry and Upstate powers, a place this legislator finds filled with excellent possibility. It also implies that we find, each year, a coherent and persuasive agenda that moves forward the interests of our constituents, as well as the interests of the state as a whole. This is one of the reasons why we have spent much of the off-season in consultation with key local constituent groups, and also those who might share those interests in other parts of the state.


In a parallel process, our constituent service is all about making the machinery of the state responsive to the needs of the individual. If you are having difficulty with securing a state provided service, your representative is the person to contact. Part of our mandate is to know that one person at MUSC who can find your child a bed and the appropriate treatment he or she requires. If you’re trying to open a restaurant and you think you are getting the bureaucratic runaround on the liquor license, your representative can usually help, either with securing proper paperwork or locating a decision maker at the state. Our role is to not only to make the rules, but also to help make the rules work as intended. Usually, it’s a matter of facilitating communication.


As we approach the kick-off, the meeting schedule is compressing and my time is just filled to capacity, I want to ask a favor. When you have a problem, please put all the information in an email and send it to me, or to your representative if you don’t reside in District 118. If there are questions, we will give you a call for clarification. If you have a good suggestion, please send it via email. I will make certain the proper person or committee reviews it.


This is all somewhat counterintuitive to me as I would much rather speak with folks face to face, make my notes, then pass the notes along to the proper administrator or another representative for action. Unfortunately, this is more appropriate to the time when Beaufort County was truly a backwater. For me, there is always a conflict between the old way of personal service, and the new way of low-cost efficiency. As a tax cutting conservative, I must be efficient in my job. That doesn’t mean that when you visit the office, I won’t make you a good cup of coffee and hear your story. Last year, we served a boatload of coffee and heard a lot of good stories. Efficiency is not everything.

Wednesday, January 1, 2014

From the House

Bluffton Today

On the first day of this promising new year, I want to emphasize all those good things we have been blessed with this past year, with an eye toward keeping the positive momentum. To that end, I have spoken with a number of local business folks, many of them my Promenade neighbors, many from around the Old Town and other parts of District 118. The overwhelming consensus is that 2013 was a turnaround year, with good business and even better prospects for 2014.


For example, our new pizza place, between Councilman Ted Huffman’s excellent barbeque joint and dependably good Captain Woody’s, called Moon Mi, has only been open for a few months, but we have already blown away our admittedly modest productivity targets. The news is about the same across the board.


As part of our preparation for session that begins in less than two weeks, I spoke with my friends at the Department of Employment and Workforce, hoping to gauge what we might be looking at in terms of tax revenue this coming year. It seems that my informal polls and estimates were pretty close to the mark as far as new jobs and less unemployment were concerned. Unemployment in our state in November was around 7.1%, which is comparable to the rest of the country. The last time these numbers lined up was 2002.


The unemployment rate in Beaufort County for November was 5.9%, which compares very favorably with the 7.2% we endured last year at this time. Jasper County was around 6% unemployment in November, which was a massive improvement over the 7.6% unemployment we had in November 2012. With movement in our numbers such as we are seeing, it is easy to be optimistic.


I had a chance to speak with my friend Kim Statler last week and she did nothing to diminish my optimism. In fact, she swore me to secrecy on the details, but intimated that she and her economic development group were in talks with an international company that is looking at both Beaufort and Jasper counties as possible locations for a new major employer. They will be making presentations before a subcommittee of Ways and Means in a few weeks, with the possibility of relocating an installation from overseas to our neighborhood. Not only is this good news for possible new employment, it is also good subject matter when we reengage talks on the much needed Jasper port.


Related to all this is our ongoing mission to gain per-student appropriation parity for our four-year baccalaureate university, as well as our excellent technical college. With new jobs, we need educated and trained young people, or not-so-young people, to fill and excel at those jobs. Your legislative delegation made creditable progress last year on this mission, but this year we will bring it home. Our students in Beaufort and Jasper counties are just as deserving of equitable educational support as any students in the state. We will not rest until this injustice is corrected.


As our economy rebounds, it becomes more and more important that we finally address our failing roads and bridges. I expect that the business groups, such as the South Carolina Business Roundtable, will return to the statehouse with an even stronger case as to why we must repair and update our transportation infrastructure. Even with our excellent port facilities, and potential new facilities, businesses need to know they can move their goods to and from the ports without delays or damage due to bad roads or failing bridges.
Happy New Year, friends. This is going to be a good one.