By Jenny Munro, The Greenville News
Published October 2, 2009
South Carolina’s bankrupt unemployment trust fund is on its way to racking up $1 billion in federal loans that must be repaid, and Gov. Mark Sanford wants to jump-start a discussion on how to deal with the problem.
The state’s unemployment rate was 11.5 percent in August, and South Carolina officials have borrowed money from the federal government for the past year to pay jobless benefits to those out of work.
An unemployment roundtable, hosted by Sanford and the state Department of Commerce, will bring together business leaders, government leaders, legislators, media and interested citizens to discuss the trust fund, reform of the state Employment Security Commission, workforce training, matching workers with job opportunities and the numbers behind the unemployment numbers.
The roundtable is planned for Oct. 19 in Columbia and more details will be released later.
“A billion dollars is a massive problem,” said Ben Fox, the governor’s spokesman. “It’s very much time to act on this.”
Sanford, who said he’s concerned about the potential of “counter-productive tax increases,” said, “Simply raising unemployment insurance taxes is the decidedly wrong answer in this situation.”
He said the debt crisis “is exactly what we warned of nearly a year ago when advocating for reform at the ESC. Reform – coupled with enhanced workforce development and better soft skills training – is vital not only for the business community to survive and indeed thrive, but also vital to this larger notion of fairness and minimizing the tax burden on the job-creating businesses and hard-working people across this state.”
Frank Knapp, president and chief executive of the South Carolina Small Business Chamber of Commerce, said reform is needed. He said small businesses, which don’t use the system nearly as much as larger ones, pay more than their fair share to support it. Restructuring the system is a necessity.
Companies that have used the system more should pay a greater proportion of the funds needed to rebuild the trust fund, he said.
But Knapp said other changes also are needed – and one of those might be increasing the taxable wage base. A panel of government and business leaders recently recommended increasing the taxable wage base of $7,000 to $14,000 as well as increasing the tax rate in all categories, bringing more money into the unemployment insurance trust fund.
Original article: http://www.greenvilleonline.com/article/20091003/BUSINESS/910030306/Unemployment-roundtable-scheduled-by-governor