Haley: "Join the Movement"

By Charles Sowell  

MARCH 10, 2011 1:55 p.m. (0)

Gov. Nikki Haley was blunt during Monday night’s Town Hall Meeting at Greenville Tech; South Carolinians in all walks of life are going to hurt over the budgetary decisions brought on by the recession and past legislative actions.

But she promised to make smart choices and to do all within her power to make sure the cuts do not hurt the least of the state’s citizens excessively.

In a particularly sharp exchange with Henry Harrison, CEO of American Services, over planned increases on unemployment taxes for companies that laid off the most workers during the depths of the recession; Haley said she doesn’t listen to politicians.

“I listen to the cooks and the janitors, the people who elected me,” Haley said.

Several of the front two rows at Greenville Tech’s Resource Center Auditorium were reserved for Haley’s “Join the Movement” supporters but were also occupied by a mix of moms pushing disabled children in wheelchairs, state and local lawmakers, and tea party partisans.

Haley’s election was jump started by tea party favorite Sarah Palin and she failed to win the endorsement of the state Chamber of Commerce in her general election contest with state Sen. Vincent Sheheen.

That rift in the normal state political scene was evident at Tech.

State Sen. David Thomas said business can’t stand the kind of tax increases planned for the companies that laid off the greatest numbers of workers during the recession.

Haley likened the new rates to automobile insurance where those with the greatest numbers of tickets pay the highest rates. She also said the rates would go down over time for companies that showed improved claims records.

Harrison said, after the meeting, that business and industry leaders were caught flat-footed by the new rates.

“We negotiated our contracts for services in September and October,” he said. “We had no idea these kinds of increases were coming.”

He said instead of a jobs agenda state leaders are doing all they can to ensure that unemployment rates go up by taxing business in an unreasonable manner.

Officials have said the state jobless benefit fund suffered due to a combination of factors. A cap was placed on unemployment taxes during flush times before the recession that enabled a few companies to use more benefits than they were paying for.

After the recession hit loose criteria for qualifying for benefits saw the now restructured Employment Security Commission burn through an $800 million surplus and run up a nearly $1 billion deficit with the federal government.

Haley took on the other 800-pound gorilla in the room with little prompting by the audience.

“State workers now and in the future are going to face higher payments and lower benefits,” she said.

The state could face up to a $30 billion shortfall in funding for state worker retirement and benefits in the coming year.

“It’s like having a mortgage on your home and not even making the interest payments,” Haley said. “In just a few months the bank will foreclose.”

There is no word on how a change by Moody’s Investors Service in the way they rate state creditworthiness will affect South Carolina. That change takes into account unfunded pension and health care obligations.

The Pew Center on the States found a $1 trillion shortfall nationwide in funding for retiree benefits in 2008. The non-partisan data center said that the bill coming due for state was likely much higher since it did not reflect severe investment declines and the refusal by state lawmakers to fully fund pension programs.