Perhaps one of the most arrogant things that any legislature can do is to adopt the idea that every single part of life must be controlled by law. There have been many examples of this throughout the current legislative session, but one of note is H.3945.
3945 would require new school buses put into service after July 2020 to have “lap seat belts” to secure students on their way to and from school. Buses manufactured before this date would not be subject to retroactive fitting of seatbelts.
This bill raises several questions.
Why is this bill even necessary? Furthermore, the bill states that bus drivers are not liable for any damages that occur as a result of not securing passengers with a seat belt. This despite making bus drivers responsible for ensuring that all passengers are buckled. If there’s no meaningful penalty for failing to comply with the legislation, what’s the purpose?
What happens if a student refuses to comply with the driver’s order to secure his seatbelt? And given that there is no penalty for not ensuring that seatbelts are fastened securely, what’s the point? Representative Barton raised this very question on the House floor during debate over this bill.
Why would the General Assembly waste time on legislation like this, given the lack of competent legislation in much more important areas? The only thing that can be said for this bill is that it’s feel-good legislation that “does something.”]]>
Today the Senate continued yesterday’s debate of the gas tax bill, which raises the gas tax by twelve cents per gallon (up from the ten-cent hike passed by the House) to “fix roads.” While the House version included some elements of reform, the Senate Finance Committee stripped everything but the tax and fee increases.
The debate today centered on an amendment that would add tax cuts to “offset” the gas tax increase. How will that work? In a nutshell, the amendment tweaked the income tax brackets, but those adjusted brackets kick in only if government revenue grows. The amendment also includes an earned income tax credit, ostensibly to provide relief to low-income South Carolinians who don’t pay income taxes. Whatever form they end up taking, these tax offsets will work about as well as tax-swap schemes usually do. They may be revenue-neutral to government, but they are never cost-neutral to the taxpayer.
Of all the amendments debated today, only one attempted even a partial reform – but even that amendment kept the tax hike. What we didn’t see today was a real focus on the things that matter most to the people of South Carolina – reforming the broken, corrupt transportation system and shifting the power from lawmakers to the people. So far there have been no efforts on the Senate floor to eliminate the unaccountable DOT commission and make the DOT a cabinet agency accountable to the governor or to eliminate the notoriously wasteful and corrupt State Transportation Infrastructure Bank.
What you did hear today if you tuned into the debate was a lot of rhetoric. For instance, one Senator argued that the tax hike is so small citizens will hardly feel it at all – about the cost of one soft drink per week. On the other hand, Senators also claimed that the tax increase is possibly the largest economic development project the state has had in years. Why? Because apparently this tax hike is going to rebuild the road industry. Which makes sense when you think about it, because the most powerful lawmaker in the state and more than one DOT commissioner (plus many of the lobbyists pushing for the tax hike) are a part of that road industry.
The debate is still ongoing. Those who wish to follow it in real time can do so on Twitter via the #SCRoadsDebate hashtag. We will also post periodic updates here on our website and Facebook page.]]>
Many cities across the country have what could be called a “stadium problem.” This problem occurs when a sports team – usually, but not always an NFL team – issues an ultimatum. Unless the franchise is given some form of preferential tax treatment, or the city issues new bonds for the construction/maintenance of stadium facilities, the team will go elsewhere. The implied threat is that, if the team goes elsewhere, the city will miss out on all of the associated tax revenue that comes from having a sports team in that location.
South Carolina has fallen victim to that line of thinking – not with an NFL team but with a NASCAR venue.
Consider H.4009. South Carolina state government, as SCPC’s Duncan Taylor has shown elsewhere, has a marked tendency to exempt more sales tax than it collects. H.4009 nicely illustrates why this is the case.
This bill would allow any company that engages in the repair, construction, or improvement of a motorsports complex to be granted an exemption from sales tax for the building materials, fixtures, and equipment that go into a motorsports complex. The company would be granted this exemption after applying for a permit from the Department of Parks, Recreation and Tourism (PRT). The bill also creates a separate fund within PRT for the awarding of grants or loans to promote “motorsports tourism” and related “hospitality projects.”
As with many such bills passed by the legislature, H.4009 raises this question: What’s so special about “motorsports tourism”? Why, in other words, should that industry get a sales tax break, but most other industries not get the break? The answer doesn’t have anything to do with the intrinsic worth of motorsports tourism – how could we know such a thing anyway? – but instead with that industry’s connections at the Statehouse.
The argument from lawmakers, of course, is that motorsports tourism is a big industry and “brings jobs” to the state. Why, though, would lawmakers reward the biggest industries and leave the smaller, struggling ones to pay the full amount in sales tax? Of course, nobody knows the real value of any one industry, and in any case singling out some for special benefits is intrinsically unfair and contributes to the atmosphere of cronyism throughout state government.
A better and fairer policy would be to scrap all the special benefits and lower the overall rate – for everyone.
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When the gas tax hike bill (H.3516) was going through the House, House leadership circulated a flyer (click here) purporting to show how revenue from the gas tax is currently spent.
Of the 16.75 cent tax, says the flyer, only around one penny goes to “address current state system needs such as congestion, safety enhancements, bridges, and improving pavement conditions.” While that’s technically true about current allocations, it’s not true by law – it’s true because lawmakers prefer it that way. The state code allocating the gas tax paints a very different picture.
The current gas tax is 16.75 cents. Here is how the law directs that money to be spent:
Of these allocations, only the transfers to the DNR, DOA, and DHEC do not go to roads in some way, and this year a proviso in the House version of the budget would suspend the DOA transfer and give that revenue to the DOT as well (this proviso is not in the Senate version). This means that 16.2 cents of the state gas tax does indeed go to roads.
Directing funds to infrastructure in general does not mean the money goes to paving. State law places additional constraints on this funding. For instance, the DOT must transfer $50 million of non-tax revenue to the STIB every year, in addition to contributing the equivalent of one cent of the gas tax as mentioned above. STIB only funds new roads and expansions of existing roads; it does not maintain or repair existing ones.
Revenue in the state highway fund goes to everything from road construction and maintenance to purchasing right-of-way for highway construction projects to overhead for issuing and administering permits.
The important thing to note, however, is that most of the gas tax spending itself is discretionary – meaning that while the law permits it to go to different things, nothing in the state code prohibits the money from going to pothole paving.
The DOT’s budget is controlled by the DOT Commission, which in turn is controlled by a few legislative leaders. Over 12 cents of the gas tax is under the direct control of the DOT and most could be spent on the maintenance of existing infrastructure if the agency so chooses. Hence the need for structural reform before any discussion of increasing revenue: the less accountable an agency is, the more likely it is to make decisions suitable to the preferences of its managers – in this case, legislative leaders and commissioners – rather than the preferences of the taxpayers.
The situation with STIB is even worse. That agency has historically financed projects in only a few of the state’s 46 counties, and doesn’t fund maintenance or repair. That, in essence, is why roads in some counties have fallen into disrepair, even as DOT’s budget over the last ten years has steadily grown and most of the gas tax goes to roads already.
In short, if only one cent of the gas tax is going to paving, lawmakers are free to change that formula — and they ought to change it before asking taxpayers to clean up the mess created by the state’s failure to prioritize.
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Being able to earn a living is one of our most fundamental rights as human beings. The other rights that we possess matter little when our ability to simply earn a living is in question. Many of South Carolina’s licensing regimes, however, actually threaten South Carolinians’ ability to earn an honest living by subjecting them to burdensome licensing and review requirements by various boards and commissions.
For a particularly silly example of this, look no further than H.3417, currently sitting in the Senate Labor, Commerce, and Industry Committee after passing out of the House. This bill creates a new licensing regime for mobile barbershops in the state. Barbers are already forced to undergo licensing by the South Carolina Board of Barber Examiners. Why do barbers need additional licensing by the state of South Carolina?
This bill is symptomatic of a broader issue in the state – too many professions are subject to licensing and often by people who have a vested interest in suppressing competition. Making it difficult, time consuming and expensive to become a licensed practitioner of whatever craft you want to do is unjustifiable, even under most standards of “public safety.” Far too frequently, “public safety” policies have a shocking amount of overlap with protectionism (keeping competitors out of an industry).
Perhaps South Carolina should follow Arizona’s lead and have each licensing board explain in public what exactly they do, and why they should continue to exist.]]>
Late in March, House Republicans, including Speaker Jay Lucas, sponsored a bill requiring increased disclosure on elected officials’ statements of economic interest. On its face, the legislation seems to tighten disclosure laws pretty significantly. The main items:
(1) Officials would be required to disclose direct payments from any governmental sources, including federal, state, or local, but this is already required under current law. The bill does require disclosure of direct payments from any governmental sources to public officials’ businesses, which is not currently required, and expands the definition of “business” to include businesses owned by public officials’ businesses.
(2) In an apparent response to recent indictments in the legislature, the language regarding relationships and transactions with lobbyists is expanded and tightened. Under this bill, officials would be required to disclose not just the name but the nature of their relationship with any lobbyist who is an immediate family member or a business associate, the latter item including partnerships, LLCs, lease agreements, joint ownership of real estate, or any other investment or business relationship.
And (3) officials would also be required to disclose the source, type, and amount of any lobbyist income received by the official, a member of his immediate family, or a business with which he is associated. This includes contractual or employment relationships with lobbyists, including lobbying, independent contracting, or any other arrangement which results in the official being paid by a lobbyist principal. It also requires disclosure of any income from a source that received campaign contributions.
In two areas, however, lawmakers have actually loosened disclosure laws in pretty significant ways.
(1) Public or elected officials would no longer be required to disclose all the connections related to income they receive from a business contracting with the governmental entity with which they serve. So if Senator John Doe sits on the board of a government entity (a common though often unconstitutional practice in South Carolina), and Senator Doe’s company receives income from a company that contracts with that same agency, he would no longer have to disclose anything.
And (2) public or elected officials’ immediate family members (with the exception of spouses) would no longer be required to disclose their private income sources – a clear incentive to put business interests in one’s son’s or daughter’s name.
Too often, faced with a simple reform, state lawmakers treat legislation as if it were a complicated recipe: some ingredients stay in, some go out, some of the proportions change, etc., etc. – to the point at which lawmakers themselves don’t know what’s in or not in the bill, and the bill gets passed for the sake of passing it.
So far, a simple reform is getting complicated.
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Maintenance of one’s property – whether a house, a boat, or an electric guitar – is the responsibility of the owner. Everybody, we suspect, would agree to that. And yet there is S.566.
S.566 would allow a taxpayer with a vehicle registered in South Carolina to claim a refundable tax credit of up to 150 percent of his spending on vehicle maintenance for that year. Essentially, if a taxpayer spends $100 on vehicle maintenance, he would be able to claim a $150 credit against his income taxes for that year. The limit on this tax credit is 150 percent of the amount of gasoline taxes that the taxpayer paid that year.
This bill is a way to offset any increases in the gas tax that the legislature may pass this session. Nobody should confuse this convoluted credit with tax reduction. It’s not tax relief; it’s another layer of complexity added to an already complex tax structure. If lawmakers want tax reduction, they must spend existing revenue frugally so that no taxes need be raised; S.566 would simply throw another credit into regressive, inefficient, and confusing system.
In short, here’s another example of a bill that’s meant to counteract negative effects of another bill, while adding yet another layer of complexity to the code of laws.
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There seems to be broad agreement (except, perhaps, among Statehouse legislative leaders) that the state’s road funding system needs structural overhaul. Structural reform at the DOT is no longer the foreign suggestion it was three or four years ago.
H.3703 would restructure the agency, most notably by abolishing the DOT commission. The bill would also enable the governor to appoint the agency’s secretary with advice and consent of the Senate, making the department solely accountable to one person. An auditor would be assigned to the department from the State Auditor’s office and DOT would be required to create a long-term statewide transportation plan that covers at least the next twenty years. This plan would include processes for consultation with local officials and metropolitan planning organizations. The department would also be required to make a priority list of the projects in the plan.
At present, the agency is an unaccountable mess. Under current law, seven of its eight commissioners are elected by the delegations of the seven congressional districts. The remaining commissioner is appointed by the governor. Prior to eligibility for election to the commission, a candidate must first be screened by the Join Transportation Review Committee (JTRC) – a committee made up entirely of legislators and legislative appointees, the majority of whom are controlled by the House Speaker and Senate President Pro Tem. Any citizen wishing to speak to someone actually responsible for policy and funding decisions will – let’s say – have a difficult time.
The DOT secretary monitors day to day activities and oversees the implementation of the transportation plan created by the commission. It is largely an administrative position. While the Secretary is legally empowered to approve emergency repairs and routine maintenance, the largest and most significant projects and expenditures are controlled by the Commission. H.3703 would make the secretary directly accountable to the governor – which is to say, to the entire state. The bill gives the secretary the added responsibility of developing the Statewide Transportation Improvement Plan and the Statewide Mass Transit Plan, instead of only implementing them. He or she would also be granted the authority to push projects along to be accomplished in a timely fashion.
The underlying principle here is this: the less accountable an agency is, the more likely it is to make decisions suitable to the preferences of its managers – in this case, legislative leaders and commissioners – rather than the preferences of taxpayers. Under the current structure, that means prioritization of expansionary projects in politically important districts and a corresponding neglect of maintenance in other – especially rural – counties.
Unfortunately, the State Transportation Infrastructure Bank (STIB) is not abolished in the bill – another much needed reform. The STIB contributes to financing eligible transportation projects as chosen by its board. The STIB has historically financed projects in only a handful of the state’s 46 counties, and it has never contributed financing to maintenance or repair. Recently, legislation has increased the STIB’s recurring annual appropriation.
Still, placing the DOT under the governor – and not subjecting the governor’s choice to a convoluted series of legislative approval, as is done now – would amount to genuine reform.
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You probably didn’t know this, but South Carolina apparently has a problem with unlicensed sign language interpreters. That’s right – using sign language to interpret audible messages without a license. Fortunately, Sen. Katrina Shealy has introduced S. 548 to combat this problem.
This bill would license, regulate, and mandate requirements for sign language interpreters that work for any state agency, school district, hospital, etc. All sign language interpreters would be required to register with the Department of Labor, Licensing and Regulation, abide by legislatively mandated standards of competency and pay a fee for administering the additional regulation. Currently, in some extreme cases, whenever a deaf individual is part of legal proceedings, the interpreter must be approved by the South Carolina Association of the Deaf. If this legislation becomes law, however, the Sigh Language Interpreters Act would be the guide for approval.
By defining in detail how exactly a sign language interpreter must be educated and the competencies the interpreter must exhibit, the proposal will finally help rid the state of South Carolina of underqualified sign language interpreters.
Read more on the burdens of regulation by scrolling through our regulation tag.
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If more money were the answer to the state’s infrastructure woes, the topic would hardly be worth debating. The real trouble with South Carolina’s roads, though, isn’t a lack of money. It’s a lack – indeed, a total lack – of citizen control or influence on road funding.
How do we know more money won’t produce better roads?
Consider the fact that since fiscal year 2011-2012, the Department of Transportation’s (DOT) total ratified budget (from all three parts of the budget – General Fund, federal funds, Other Funds) has grown by more than $500 million, from $1.1 billion in 2011, to more than $1.6 billion in 2016. Further, the State Transportation Infrastructure Bank’s (STIB) has skyrocketed from $50 million in 2014, to a whopping $270 million in 2016.
The state’s transportation budget is growing, then – more money has been put into it – with no discernible improvement.
The common misconception by proponents of a gas tax increase is that the state needs more overall revenue. That’s not the same as supposing we need to spend more of what we have on repair. Consider: in the last fiscal year $396 million of the $1.69 billion in transportation funding was free to be devoted to pavement resurfacing/maintenance.
In reality, though, no one has any idea if the state needs more overall revenue. Why? Because the current system of prioritization and funding of projects is not transparent. For example, $85.1 million of disbursements from the State Transportation Infrastructure Bank have been made to the home county of Florence Sen. Hugh Leatherman – who also happens to be a member of the STIB board. Under our current system, it’s simply impossible to know if these monies were used on the most pressing transportation needs in the state.
Transparency by itself, though, will accomplish very little as long as the underlying problem remains the same – namely that the lion’s share of power over the DOT belongs to two lawmakers for whom the great majority of South Carolinians can’t vote for and have never heard of. Consider:
No reasonable and unbiased person would look at this system – a system dominated by a few people who can’t be held accountable for the total outcome – and conclude that its woes must be due to a lack of money.
Clearly reform must come before any consideration of revenue. But how?
Once these reforms are achieved, lawmakers may begin talking about taking more money from taxpayers and putting it into the transportation system. Not until then.
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