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WINTER/SPRING
NEWSLETTER
2009 LEGISLATIVE SESSION
CURRENT ISSUES
Senator Wes Hayes
District #15
The 118th General Assembly begins with great economic
uncertainty for South Carolina. The unemployment rate in January was at 9.5%,
its highest rate in years. Unfortunately, when public funds are most needed,
available state revenues are at their lowest. The "Federal Economic
Stimulus Package" may give only minor relief because the $504 million
dollars designated for South Carolina is earmarked primarily for unskilled jobs
applied to secondary road repair and improvements. While there is some
anticipation that this will provide temporary relief to many unemployed, it does
not address all the needs that a well rounded budget provides such as supporting
needs for public safety, education, clean water and adequate infrastructure,
economic development, and health needs for our needy and disabled citizens.
Regardless, of our current circumstances, I am still committed to provide sound
efficient government services to insure a good quality of life for all of South
Carolina's citizens. I was disappointed last year that we were not able to
increase the cigarette tax, pass tougher pay day lending regulation, or pass a
surface water removal bill. My efforts to pass these laws this year are already
underway, and I certainly plan to continue the fight to find a better way to
distribute education dollars in order to keep fast growing school districts like
the four in York County from falling behind in the quality of the education they
provide.
SURFACE WATER PERMITTING ACT. For
several years now, I have sponsored legislation in the General Assembly
requiring all major users of water (more than 3,000,000 gallons a day) in South
Carolina to obtain a permit for their water use. My Bill has the principle
backing of the state's conservation groups. Senator Paul Campbell of Goose Creek
introduced a Surface Water Permitting Bill that is primarily supported by the
industrial groups. Both Bills are similar in nature, differing most
significantly in the amount of water that must remain in the state's rivers and
streams in order for there to be enough water to maintain a safe yield for human
consumption and availability. Also, Representative Carl Gullick of Tega Cay has
introduced a companion to my bill in the House of Representatives. With Rep.
Gullick's bill present in the House, and both groups impacted by the legislation
having similar Bills represented, I am encouraged that Legislation to protect
our waterways will pass this year.
CATAWBA RIVER LAWSUIT. Attorney
General McMasters continues his aggressive pursuit of the lawsuit in the Federal
Supreme Court against North Carolina seeking to halt North Carolina's attempt to
establish an Inter Basin Transfer of Water from the Catawba River to the
Concord/Kannapolis area. At the base of the suit is South Carolina's position
that North Carolina has no right to remove water from a shared river basin
without South Carolina's approval. I am grateful to Attorney General Henry
McMaster for taking up this cause. Many municipalities and county governments
have contributed large sums of money to this effort. Last year the General
Assembly appropriated $1,400,000.00 for this effort. Given our budget
shortfalls, it is going to be difficult to find the money to support the
Attorney General's continuing efforts on our behalf. However, I think this
effort is necessary and is vital to the quality of life and future development
of all of South Carolina since the state receives most of its water from North
Carolina.
STATE GOVERNMENT SPENDING LIMITS.
This Session I joined Sen. Glenn McConnell in sponsoring a joint resolution
calling for a referendum by our state citizens to approve a Constitutional
amendment requiring fiscal responsibility by limiting spending growth to a rate
of population growth plus the growth in personal income. State spending is
skyrocketing. Government growth outpaces personal income three-to-one. Since
2004, state spending has grown 9% each year while family incomes in South
Carolina have grown only by 3%. In that same period, the median family income in
"South Carolina has risen only three percent per year. In the year 2007,
general fund spending rose 18%. The call for this Constitutional budgetary
action would also require putting money aside in a control mechanism during high
financial growth to cover shortfalls in times, like the present, when money for
much needed services is unavailable. Sen. McConnell calls this the "Revenue
Stabilization Fund." This constitutional amendment will also stimulate
growth in the private sector, and will challenge legislators to better control
spending.
COMPREHENSIVE TAX REFORM. This Bill,
sponsored by Senator Hugh Leatherman and passed by the Senate Finance Committee,
creates the Tax Realignment Commission, a team of experts who will examine the
state’s complicated tax code and make recommendations on how to best reform it
for economic prosperity. Senator Leatherman’s plan is modeled after the
federal BRACC program to examine these exemptions while removing the political
pressures from the process. An independent commission to assess the
effectiveness of the current tax system structure and to provide recommendations
for changes to the General Assembly would alleviate the concerns of politics
dictating tax policy.
CIGARETTE TAX. I still feel
confident that this will be the year South Carolina increases its cigarette tax.
Including a Bill sponsored by Speaker Bobby Harrell, there are approximately
five cigarette tax related bills pending before the House Ways and Means
Committee. Leaders from "both Chambers of the General Assembly and both
major parties are eager to implement an additional tax on cigarettes; however,
they remain split on how to spend the expected revenue. Some say the money
should go toward care, while others want the revenue to offset current taxes, or
not increase the state government's financial commitments" according to
news reports across the state. My primary concern is how the new revenue will be
used. I continue to strongly support application of these funds for medical
services, which continues to uphold the logic that the tax helps to offset the
medical cost caused by medical hazards of smoking.
GOVERNMENT RESTRUCTURING. Last year
the House of Representatives passed a Government Restructuring bill that had it
passed the Senate would, among other things, have allowed the people to vote by
referendum to change the State Constitution to place the Lt. Governor, Secretary
of State, and the Superintendant of Education under the authority of the
Governor. This authority has been long sought by Governor Sanford, and the Bill
has been re-introduced this year. Also, the Governor proposes the creation of a
Department of Administration composed of many agencies under the authority of
the governor, be combined and established at the "Governor's Cabinet"
level. Many feel there is a good chance this will happen this session, thus
allowing for a referendum on these issues to be present on the next General
Election Ballot.
PAYDAY LENDING. Last year an attempt
was made in the Senate to strictly regulate this financial lending practice more
formally known as "Deferred Presentment Transactions." This lending
business provides short term loans for relatively small amounts of money to
individuals who find it difficult to receive credit through other more tradition
lending institutions. Because of weak regulations, it has been discovered that
many of these borrowers get into a cycle of debt from which they could not
escape. Two very similar new bills have been introduced in the House and the
Senate this year. There are already enough co-sponsors of each bill to represent
a majority in each body, making it highly likely that the proposal will be
enacted. The bills would raise the limit of a payday loan from $300 to $600, but
it would limit consumers to carrying only one such loan at a time. It would
establish a database to track payday loans and require lenders to check it to
verify that a customer is eligible for a loan. The legislation would put an
appropriate curb on payday lending. Recent economic experience has shows that
such reasonable regulation, particularly of credit markets, can be necessary.
Legislators who support this do not feel it is an overreaction to the business.
North Carolina and Georgia have banned payday lending, and some in the Palmetto
State have called for the same action by advocating legislation that would limit
such loans to an annual 36 percent interest rate. However, it is unreasonable to
look at the service fees charged by payday lenders as interest rates. These are
short-term loans, usually over two weeks. If payday lenders could only charge 36
percent interest on such loans, they wouldn't be able to charge as much as $2
per $100 loaned. That wouldn't cover the cost of their overhead and labor. The
$15 charged per $100 loaned is genuinely a fee rather than interest, like the
loan origination fees other lenders charge in addition to interest on the loan.
Like most markets, if the fees were too high, people wouldn't be paying for the
service. There is danger in the payday lending industry. It is aimed at those
who cannot qualify for less expensive credit, those who may already be deep in
debt. It poses the potential to mire them even further. But the industry is
known for not foreclosing on its clients, for not repossessing their property.
Its usual response to a client who won't or can't pay is to simply withhold
service from that client. It is hyperbole to raise an alarm about annual
interest rates in excess of 300 percent charged on these short-term loans. And
it is an overreaction to ban this business. But it is reasonable to regulate it
and make sure that South Carolina consumers are protected from abuses. The
current legislation seems to embody that goal.
RESTRUCTURING STATE PORTS AUTHORITY.
The State Senate passed legislation that restructures the State Ports Authority.
This Bill sets new qualifications for SPA board members, ensures transparency in
port actions, and provides new oversight of the State’s most important
economic development and job-creating tool. It sets the qualifications and
background that gubernatorial nominees for the SPA board should have before they
may serve. Those with maritime, shipping, finance, business, and law or
management experience could serve on the nine-member board. The bill also:
provides for a diversity of interests on the board; prohibits conflict of
interest transactions; requires that compensation for the executive director and
division directors are approved in a public vote; and, ensures the SPA develops
long-range development and financing plans. The bill further sets a mission for
the Ports Authority, and affirmative duties for the board and the executive
director. It allows the governor to remove board members for cause, and sets
their terms at five years. S.351 also calls for the SPA to move expeditiously to
develop the SPA’s new container terminal in North Charleston, and to continue
plans to develop a port in Jasper County. The bill has the support of much of
the state’s business community. It passed on a bipartisan 31-14 vote and now
moves to the House.
THE BUDGET. The current budget
planning for 2009 in South Carolina is so uncertain there is no way to project
its outcome or distribution. Funds are so limited, that the House appears to be
waiting on the Federal Economic Spending Initiative. John Rainey, Director of
the State Economic Development Board is quoted as saying, "we need it now,
we need it in February, March, and April, May and June because we're on a
trajectory for 14% unemployment in this state." Everyone is waiting on the
"Stimulus Package," but no one can expect it to booster the Budget
because the "Package" is program specific. It is apparent that we must
live within our means, and we cannot depend upon the Federal Government to
balance our State Budget, even if money does come. Regardless of outcomes, I am
committed to Public Education, especially to Public Education in York County and
basic public services such as a good, clean, abundant supply of water. It is
important that the reputation for quality of life that this fast growing county
(and others like it) is known to provide is protected. Not only protected, but
enhanced, as is the reputation of York County enhanced by the quality of its
citizens I enjoy serving.
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