Weekly Update 5.6.2011

This Week at the Statehouse
May 6th, 2011

Budget Debate Continues

For the 2nd consecutive week, the Senate debated the FY 2011-12 $5.8 billion state budget but did not get to a 2nd reading. The Senate will reconvene beginning at 10:00am on Wednesday, May 11th.  Both the House and Senate will not meet on Tuesday (5/10) in observance of Confederate Memorial Day.    

Department of Employment and Workforce (SCDEW)

Gov. Nikki Haley announced Thursday that Maj. General Abe Turner, former Commanding General of Fort Jackson, will be replace General John Finan as the next Executive Director of the State Department of Employment and Workforce.

Turner, 56, is currently Chief of Staff of the United States Strategic Command at Offutt Air Force Base in Omaha, Nebraska. He is set to retire from active duty at the end of this month, and will take the helm of the state's jobless benefits agency Sept. 1.

Congratulations

The Upstate’s own Rep. Brian White (Anderson) was elected Chairman of the House Ways and Means Committee Tuesday. White replaces Chairman Dan Cooper (Anderson), who announced his resignation from the House effective June 29th.

Labor Issues

Senators Graham and DeMint , along with19 other Republican U.S. Senators, have urged President Obama to withdraw his nominations to the National Labor Relations Board (NLRB) following the agency’s complaint against the Boeing Co.’s decision to locate a new production plant in South Carolina.

The complaint filed by the NLRB last month alleges Boeing located a new assembly line for the 787 jetliner in North Charleston to retaliate against union workers in Washington State. The NLRB is seeking a court order to force Boeing to do the 787 assembly work in Washington state, even though the company has a new plant in South Carolina — a right-to-work state — and hired workers here.

Medical School Expansion

The S.C. Commission on Higher Education (CHE) will begin their review of the expansion of the University of S.C. Medical University to Greenville on Thursday (5/12). The CHE will also meet on May 19th and then wrap up discussion with the final hearing and response on June 2nd.

Presidential Debate

The nation’s first GOP Presidential debate was held in the Upstate Thursday. The debate took place at the Peace Center for Performing Arts in Greenville and was covered live nationally by Fox News. 

Redistricting

As we get closer to the end of this legislative year, the issue of redistricting will soon become a main topic of discussion. To take a closer look at the new Census data for South Carolina, please click here. In addition, the SC House and Senate have set up websites to update the public on the redistricting process. For more information visit http://redistricting.schouse.gov/ or http://redistricting.scsenate.gov/.

Sine Die

The last day of the legislative session is Thursday, June 2nd. However, this week the House adopted the Sine Die Resolution, H.4195, that would allow them to return to Columbia Tuesday June 14th, and continue in statewide session and adjourn no later than 5:00 pm, Friday, July 1, 2011. The resolution specifies consideration of gubernatorial vetoes, Sine Die adjournment, appointments, sympathy and congratulatory resolutions, local legislation, concurrence in amendments, conference committee appointments and reports, reapportionment, ratification of acts, and toll regulations. They will also address state and federal reapportionment.

Tort Reform

The S.C. Civil Justice Coalition held a press conference this week to urge Senators to pass tort reform legislation this session. Gov. Haley was joined by House Speaker Bobby Harrell (Charleston) and Senator Larry Martin (Pickens). Over 100 business leaders from across the state stood with the Governor during the press conference to show their support for tort reform. 

Governor Haley said that legislation capping punitive damages is important to job recruitment and reminded senators that the measure is on her legislative report card that will be distributed publicly.

As the Senate gets closer to a vote on the budget, the statewide business community continues to urge senators to move forward with debate on tort reform. The House passed, H. 3375, a comprehensive tort reform bill in mid-February by a vote of 100-7. Even though tort reform was set for Special Order in the Senate in March, the Senate has only spent two days debating the legislation.

Unemployment Insurance

 As you know, things change with the wind in Columbia and late yesterday, we had new developments regarding the unemployment insurance issue. Here's what transpired Wednesday evening and where we currently stand:

-   The S.C. Board of Economic Advisors (BEA) is expected to announce next week (5/12) that the state will have a revenue surplus of over $100 million. 

-   Senator Leatherman (Senate Finance Chairman, Florence County) proposed to use $100 million of the surplus for UI relief instead of taking out revenue bonds (which was included in Governor Haley's "Scenario 27 modified proposal”).

-   After floor debate and private discussions, late yesterday, the Senate adopted a proviso into the budget that will potentially provide $100 million worth of unemployment insurance relief to employers. 

-   This proviso will be part of and contingent upon a package deal that will be debated as early as next week.    

The rate reduction hinges on lawmakers passing a separate bill (most likely amending H.3762 w/ language from S.478) that would reduce the length of time the jobless can claim state unemployment benefits to 20 weeks from 26 weeks (as a result, the federal benefits will begin at 20 weeks and are proportionally reduced to 73 weeks total). There are also several technical changes that will be included in the bill including seasonal pay restrictions.

*Bottom line - all employers in tiers 2-20 will see a reduction of approximately 18% for 2011. Details are still being worked out, but if employers have already made a SUTA payment for the 1st quarter, they would most likely receive a credit for that payment. If the employer still has a surplus at the end of the year, they would most likely receive a refund check.

-   Senator Leatherman has said that it is imperative for the bill that will come up next week in the Senate to pass both Chambers in order for employers to see the 18% relief. If the bill does not pass before the end of the session, the $100 million will most likely go to pay down the federal loan balance leaving employers with little to no relief this year.  

-   Governor's plan - "Scenario 27 modified"

The Governor still feels that her plan is a sound solution that would provide relief. It did have traction and gained the support of many legislators and business organizations from across the state. However, after the B.E.A. estimates, Senator Leatherman's plan has the most momentum right now. There are several things that have to happen for the new plan to work, and we have been told Governor Haley will push her plan if this one does not materialize.