Hayes for Senate, South Carolina District 15, York County

WINTER/SPRING NEWSLETTER 2011
2011 LEGISLATIVE REVIEW
Senator Wes Hayes District #15

The first regular session of the 119th General Assembly convened on January 11, and it is shaping to be another challenging year as we continue to face revenue shortfalls and begin the reapportionment process at the state and federal levels. I am pleased that the 2010 Census results earned South Carolina a seventh congressional seat, and Attorney General McMaster was able to reach a settlement with North Carolina in the Catawba River lawsuit. While I also am happy to report that South Carolina’s unemployment rate decreased in 2010 from 12.5% in January to 10.6% in November, there still remains room for tremendous improvement in 2011. I look forward to the challenges that lie ahead and remain committed to providing sound, efficient government services to insure a good quality of life for all of South Carolina's citizens. This Newsletter summarizes the key points of several pieces of legislation pending before the General Assembly this Session.

THE BUDGET. Funds available for appropriation from South Carolina’s General Fund have decreased for four consecutive years, and the majority of the stimulus funds will not be available this year. Peak revenue collections reached $6.7 billion in FY2006-07, and the General Fund appropriation base for FY2010-11 is approximately $5 billion after accounting for roughly $52 million in gubernatorial vetoes that were sustained by the House and Senate last Session. Although the overall General Fund budget is down 25% over the last three years, the cuts, thus far, have been targeted instead of being applied equally across the board. Looking ahead, initial estimates by the Office of State Budget placed the budget gap for FY2011-12 at approximately $1.4 billion; however, a more recent estimate predicts the gap will be closer to $800 million. While this appears to be good news, several state agencies have declared operating deficits of more than $300 million in the aggregate. Furthermore, DHHS estimates that it will require an additional $663 million just to maintain its existing level of services and doctor reimbursements. Revenue from the cigarette tax increase only is expected to offset $105 million of that need. Thus, this year will continue to be a challenge as the citizenry’s demand for basic governmental services clashes with a lack of funds and resources to provide these services.

ARIZONA-STYLE IMMIGRATION BILL. Senator Grooms has sponsored legislation similar to the Arizona-style immigration laws. This Bill would allow law enforcement officers, during a lawful stop, detention, or arrest, to determine the immigration status of the person stopped, detained or arrested if the officer has a reasonable suspicion that the person is an alien or unlawfully present in the United States. The person’s immigration status must be verified by a law enforcement officer authorized by the federal government to ascertain an alien’s status, the United States Immigration and Customs Enforcement, or the United States Customs and Border Protection. A person is presumed to be lawfully present in the United States if the person provides to the officer a valid South Carolina driver’s license or Department of Motor Vehicle’s identification card, tribal identification, or any valid federal, state or local government issued identification. The Bill also would prohibit a person unlawfully present in the United States from knowingly applying for work, soliciting work in a public place, or performing any work as an employee or independent contractor.

ETHICS REFORM. As Chairman of the Senate Ethics Committee (the “Committee”), I have introduced legislation this Session to amend South Carolina’s ethics laws applicable to Senate members to make these rules more consistent with the ethics rules applicable to members of the executive branch and local officials. This legislation would make publicly known all ethics investigations upon a finding of probable cause by the Committee that a violation has occurred and require any hearing on the matter to be conducted in open session. Under current law, Senate ethics matters remain confidential unless the Committee takes public action, and all hearings are conducted in executive session. This legislation also provides the Committee with the authority to impose fines up to $2,000 for ethics violations. Under current law, any action taken by the Committee is limited to a private or public reprimand, recommendation of expulsion, and/or referring the matter to the Attorney General for an alleged criminal violation.

SC vs. NC: CATAWBA RIVER LAWSUIT SETTLEMENT. In December 2010, the State settled its pending U.S. Supreme Court case against North Carolina pertaining to water usage in the Catawba-Wateree River Basin. The settlement was agreed to by North Carolina, South Carolina, Duke Energy Carolinas, and the Catawba River Water Supply Project. The agreement does not impose specific limits on water usage, but both states agreed to regulate the use and withdrawal of water from the river basin and require conservation during periods of drought. The states also agreed to update the Catawba-Wateree River Basin Water Supply Study every 10 years, coordinate and implement policies and procedures necessary for a consistent system of approving interbasin transfers within the river basin, including North Carolina seeking input from South Carolina on future interbasin transfers, and vice-versa, and require entities withdrawing water during periods of drought to implement drought response plans that are no less stringent than the requirements of the low inflow protocol.

VOTER ID/EARLY VOTING. Last Session, a Bill was introduced that would have required voters to present photo identification before being allowed to vote in an election. That Bill also would have established an early voting period. I supported this Bill, but, unfortunately, it was stalled in a Conference Committee when Session ended. For the current Session, Senator Campsen has introduced a similar Bill. Permissible forms of photo identification would include a South Carolina driver’s license or other photo identification issued by the Department of Motor Vehicles, a passport, military identification, an employee identification card bearing a photograph issued by the federal government or the State of South Carolina, or a voter registration card containing a photograph. An exception is provided for persons who object to being photographed for religious reasons or who suffer from a reasonable impediment that prevents them from obtaining photograph identification. The Bill also requires the Department of Motor Vehicles to issue identification cards to persons aged 17 or older without cost and establishes an early voting period beginning fifteen days before the election and ending three days before the election. Unlike with absentee ballots, no special circumstances would be required for a voter to participate in early voting. If this Bill passes, it would not take effect until approved by the Department of Justice.

REAPPORTIONMENT. Every decade, after the census is completed, the General Assembly undergoes reapportionment, which is a process to move state House and Senate district lines to match shifting populations so that each district has roughly equal numbers. The 2010 Census revealed that South Carolina’s population grew by 15.3% over the past decade to over 4.6 million residents, and, consequently, South Carolina will gain one congressional district in 2012. This will give South Carolina a total of seven congressional districts. In addition to redrawing state House and Senate district lines, the General Assembly also will draw the district lines for this new congressional seat in the upcoming Session. The Justice Department will review the results at the state and federal level to ensure compliance with the 1965 Voting Rights Act.

CHARITABLE RAFFLES. Senator McConnell has introduced a Joint Resolution that would establish by referendum an amendment to the State Constitution to allow religious, charitable, educational and nonprofit organizations to operate and conduct raffles and certain fundraising events. If the referendum ultimately succeeds, a corresponding Bill would outline the parameters of how these raffles and fundraising events must be conducted and prescribe specific penalties for violations. I am thoroughly reviewing the text of the Bill to ensure that it provides safeguards and closes any loophole that might be construed to legalize video poker and other forms of illegal gambling in South Carolina.

REFORMING K-12 EDUCATION FUNDING. During the Fall of 2010, I chaired the Select Committee on K-12 Funding, whose purpose was to consider changes to how K-12 funds are distributed. Our goal was to develop a revenue-neutral funding distribution method that increases funding for impoverished students, students with a limited English proficiency, students in gifted and talented programs, students not meeting state standards, and that recognizes the need to fund basic district operational and fixed costs. In proposing legislation to accomplish these objectives, the Committee focused on the following topics: (1) flexibility and transparency (provide districts with the flexibility to transfer and expend funds from designated revenue sources and require an online check registry to address transparency concerns); (2) deregulation (require the State Board of Education to develop regulations establishing a process for districts to apply for deregulation); (3) 4K (make available statewide for certain at-risk children based on poverty levels); (4) teacher pay (update the statewide minimum salary schedule by resetting the index to the Fiscal Year 2009 level and require the Board of Education to develop regulations creating a framework for an optional teacher incentive compensation program); (5) district consolidation incentives (provide temporary funding to address funding gaps during a consolidation transition period, such as bringing all teachers up to the higher district salary level; (6) the SC Public Charter School District (address additional funding requests and distinguish between brick-and-mortar and virtual schools); and (7) replacing the Education Finance Act with a simpler system where the money follows the child.

TAXATION REALIGNMENT COMMISSION’S (TRAC) REPORT. In 2009, the General Assembly established the TRAC to thoroughly assess the State’s current tax structure. The Commission met 17 times and concluded its work in October 2010. The Commission found that South Carolina is a low tax state, as compared to its neighboring states, but its tax structure is hindered by structural deficiencies that will continue to challenge the system’s ability to produce stable revenues over time. The Commission recommended that the General Assembly expand the state’s sales tax base but lower the overall tax rate to 5%. To expand the taxable base, the Commission recommended the General Assembly repeal or modify approximately 60 of the current sales tax exemptions. For example, the Commission recommended that sales tax be imposed on groceries at a 2.95% rate (except the exemption should remain if purchased with food stamps), water and electricity at a 1.25% rate, prescription drugs at a 1.25% rate and capped at $100 annually (except that the exemption would remain intact for Medicaid/Medicare beneficiaries, cancer drugs, free medicine samples, and medicines sold to free clinics). The Commission also recommended eliminating the exemption for automobiles with dealer tags, phasing out the sales tax cap on purchases of motor vehicles, and aggressively pursuing sales/use tax on internet purchases. The Commission also suggested other changes to the State’s tax structure. The Commission’s full report can be viewed online at the following link: http://www.scstatehouse.gov/citizensinterestpage/TRAC/FinalDocuments/TRACFinalReport.pdf. The General Assembly is not obligated to introduce the TRAC’s recommendations as legislation.