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 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 $708 million. That’s about 54 percent when adjusted for inflation. Further, the State Transportation Infrastructure Bank’s (STIB) budget has grown from $50 million in 2014 to $155 million in 2015, and hit a whopping $255 million in the current fiscal year.
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 less than $300 million of the just under $2 billion in transportation funding was free to be devoted to road maintenance anywhere in the state road system.
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, 642 payments were made from the State Transportation Infrastructure Bank (STIB) to the home county of Florence Sen. Hugh Leatherman – he’s also a member of the STIB board – from 2010 to March of this year. Under our current system, it’s simply impossible to know if these monies were used on the most pressing transportation needs in the state. It seems extremely unlikely, but the truth is that there is no way to be sure.
And indeed some lawmakers have even complained that they don’t know what projects the DOT has prioritized according to Act 114 (a law they passed in 2007 that “restructured” the Department of Transportation).
Lawmakers made a gesture at transparency in the 2015-16 budget by inserting a proviso requiring the project priority list to be made publicly available.
By itself, though, that 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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The public deserves confidence that judges rule independently of the legislature whose laws they judge. South Carolina is the only state in the nation in which the legislature unilaterally appoints judges even when vacancies arise. The governor should nominate judges, with only advice and consent from the Senate.
South Carolina lawmakers control the executive branch through a complicated web of boards and commissions, to which lawmakers appoint members to run state agencies instead of allowing the governor to run them. The legislature has further diluted the governor’s responsibility by doling out power to multiple constitutional officers (the Comptroller General, Treasurer, Agriculture Commissioner, Secretary of State, and so on), thus creating little executive fiefdoms that properly belong in the governor’s cabinet.
Our state has one of the nation’s longest legislative sessions: a system that favors career politicians over citizen-legislators, and empowers lobbyists and special interests over taxpayers. Legislative sessions should be limited to 90 calendar days or 45 legislative days, every other year, forcing lawmakers to limit their activity to citizen priorities.
Corruption is virtually guaranteed when politicians have the power to strike secret deals with private companies using public money. Taxpayers deserve full transparency in all incentive deals – including public applications for subsidies, public debate on the merits of deals, and full reporting on investment “return.”
House and Senate members police their own ethics violations – and much of the process is kept private. Legislators should be governed by the same agency that governs other public officials, and details of hearings should be publicly reported.
The public has no way to ensure that lawmakers don’t personally profit from legislation on which they vote. Members of Congress and elected officials in other states report their income – and so should South Carolina politicians.
State agencies should organize their transactions and expenditures to be accessible to the public rather than charging taxpayers double for “labor” costs. And there’s certainly no justification for lawmakers exempting themselves from the state’s Freedom of Information law.
The law requires the governor to write “the” budget and the legislature to hold “joint open hearings” to debate it. Compliance with that law would allow the public to engage in the budget process in real time. In addition, lawmakers should submit the budget in a simple format that is accessible to citizens online.
Over the last thirty years or more, well-meaning reformers have tried valiantly to improve educational results within public education systems. Prominent among their reforms have been increasing education funding and expanded pre-school programs, but these efforts have failed to live up to their promise. The one reform that has produced impressive results is a body of reforms collectively known as “school choice.”
The chief idea behind these reforms is this: Expand educational options and give parents the prerogative to choose from among those options. The most successful of these reforms have involved vouchers and/or tax credit scholarships. If parents can’t find an educational option that meets the needs of their child, the state will fund – or help to fund – a different option.
With vouchers or tax credit scholarships, parents are no longer forced to send their children to only one school. That openness, in turn, encourages schools – public and private – to work creatively and innovate in an effort to meed the needs of students.
The trouble? School choice is still the object of specious arguments based on flimsy or no evidence. Here are five of the most popular:
The impressive results associated with school choice are well documented. There have been 12 empirical studies using random assignment — the gold standard of social sciences — to examine how school choice programs affect academic performance. All 12 found consistently positive results. Six found a positive benefit for all student participants, five found positive results for some students but not all, and one found no impact. Not one of the studies found a harmful effect to participants’ academic performance.
Detractors will often contend that the availability of school choice programs harms public schools. The “best” students leave for other schools, the thinking goes, leaving the “worst” students in public schools.
The research tells a different story. Out of 23 empirical studies that examine the effect of school choice on public schools, 22 found that the availability of school choice programs boosted academic performance at public schools. The remaining study found no effect.
It’s easy to see why. Most public schools — certainly this is true of South Carolina’s — receive funding based on the number of students they serve. Thus a decline in enrollment won’t decrease a school’s funding relative to its student base. Further, the presence of competing schools may actually encourage traditional public schools to find better ways to serve their students.
The evidence doesn’t support this claim. One meta-analysis examined eight empirical studies on this question. All eight either compared the racial composition of schools to the larger metropolitan area in which they were located, or measured the occurrence of racial homogeneity in schools. Of the eight studies, seven found that school choice moved students into less segregated schools, and one study found no effect.
Studies using other methods have found similar results. One research paper from the Brookings Institution examined district segregation levels over time. That study found charter schools (a form of public school choice) were unlikely to increase segregation.
Or to give an example specific to vouchers, a 2013 study sponsored by the state of Louisiana examined the state’s voucher program. That study found it improved racial integration in 16 of the 34 districts under federal desegregation orders, having little to no impact on the rest.
This is false.
But back up for a moment. The existing public school system sorts students based on geography – wealthier families have the option of moving into more expensive communities with higher quality school districts. Another Brookings paper found that in “the 100 largest metropolitan areas, housing costs an average of 2.4 times as much, or nearly $11,000 more per year, near a high-scoring public school than near a low-scoring public school.” Lower income families who cannot afford higher rental rates or home prices are more likely to remain trapped in low performing school districts.
Without school choice, well off families will also have the option of sending their children to independent schools, even as less well off families will remain stuck in the schools dictated by the state.
Some of the most popular school choice programs – tax credit scholarships (in which donors receive tax credits for donations to scholarship organizations that pay the cost of tuition at independent schools) and vouchers (in which state funding goes directly to families for tuition payments and other school costs) – are popular precisely because they make options open to wealthier families open to poorer families too.
Studies of existing tax credit scholarship programs in Florida and Arizona have found that the average families receiving scholarships under these programs earn less than 185 percent of the federal poverty line. Similarly, in 2010 the Pennsylvania Legislative Budget and Finance Committee reported the average family receiving a scholarship under Pennsylvania’s tax credit scholarship program earned $29,000.
The extent of school choice programs in South Carolina is severely limited. South Carolina does have charter schools, but the funding for South Carolina’s statewide charter school district ($69.5 million in fiscal year 2016) is tiny when compared to traditional public schools.
South Carolina also has tax credit scholarships and direct tax credits for tuition paid to independent schools, but these programs are only available to exceptional needs children and are capped at $8 million a year, and $4 million a year respectively.
The most well known and direct school choice program – vouchers, in which public education funds follow the child – doesn’t exist in South Carolina at all.
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H.4145 would create a “Workforce Development Council” comprised of the heads or former heads of many powerful state agencies (Dept. of Education, Dept. of Commerce, State Board for Technical and Comprehensive Education, Dept. of Employment and Workforce, and the Commission on Higher Education). In addition to gathering a plethora of data and regularly evaluating existing state workforce training, the Council would be charged with creating a state comprehensive plan for workforce training and education, and developing a plan to ensure there is an adequate number of healthcare workers. Local workforce development councils and elected officials would also be instructed to develop a local workforce development plan and submit it to the Council for review and the Governor for approval. Finally, the bill would create the “Pathways to First Careers” and “Pathways to New Opportunities” programs tasked with subsidizing career training programs (particularly programs that train individual for careers in industries with critical workforce shortages) for students, and adults respectively.
All of the agencies whose heads or ex-heads make up the Workforce Development Council would be tasked with helping to implement some part of the state comprehensive plan for workforce training and education developed by the Council. This bill would no doubt lead to increased spending at all of these agencies, and creates new tax credits for funding apprenticeships and scholarships for workforce training. This proposed legislation seems to fall just shy of complete central planning of our state’s labor force. Heads of government agencies cannot accurately predict the natural growth of various industries in our state and their future demand for workers. Attempts to push the state’s future labor force into favored industries will most likely result in a surplus of workers in some industries (meaning unemployment and reduced wages), and a shortage in others, both outcomes will combine to hinder overall economic growth.]]>
South Carolina’s status as a right-to-work state is often credited by government officials as the reason business is attracted to our state. But there’s something troubling about the way they talk about that status. The right to work, many of our elected officials seem to think, isn’t so much a right as an effective “economic development” tool. The fundamental principle underlying right-to-work laws – that government shouldn’t have the authority to tell people how to organize themselves in the private economy – seems to be lost in the rhetoric of “job creation.”
So lost has the principle become, in fact, that some officials and commentators seem to believe that unions are illegal in right-to-work states. They are not. They simply outlaw policies that force people to join unions against their will. The principle, remember, is not that unions are bad, but that government should not empower unions to coerce people into joining.
During National Employee Freedom Week, we’re reminding South Carolinians that employee freedom means a lot more than passing right-to-work laws. It means – or ought to mean – removing government’s power to hinder lawful and productive work. Right-to-work laws are good as far as they go, but South Carolina state government stops citizens from pursuing their work in scores of ways that have little to do with our right-to-work law.
We have, for example, more than 40 occupational licensing boards that exist primarily to hinder South Carolinians from entering the market. Of course, their stated goal is to protect the public. What they actually do is penalize low-income citizens and insulate established businesses from healthy competition. The state also spends hundreds of millions of public dollars every year on government-driven “economic development”: that’s money taken from taxpayers and used for the benefit of companies state officials favor for one reason or another.
The emphasis on “job creation” – as if it’s government’s job to create jobs – has led public officials to forget their responsibility on the private economy. Their responsibility is to foster an environment in which businesses and individuals have the freedom to innovate, and the fullest possible opportunity to create wealth for themselves and others.
The loss of focus has led many, perhaps most, elected officials to pursue policies that favor some companies and industries over others. That’s good for the favored industries or companies, but in the long run bad for just about everyone else.
A few bills proposed in 2015 will illustrate what we mean.
A pair of bills filed in our House of Representatives this year – H.3373 and H.3774 – would have the Board of Technical and Comprehensive Education to collaborate with the Department of Employment and Workforce (DEW), the Commission on Higher Education (CHE), and the Department of Education (DOE), and other alphabet soup agencies to establish a “manufacturing career pathway” for students within the manufacturing sector, and a “construction career pathway” for students in the construction sector. These bills are little more than corporate handouts for companies engaged in the manufacturing or construction sectors. It is not the state’s responsibility to encourage its citizens to pursue certain careers paths, or to provide a steady stream of trained workers for favored industry. Between the Workforce Investment Act and ReadySC, South Carolina already spends roughly $58 million yearly on workforce training with little appreciable effect to the state economy.
Another bill filed this session is even more ambitious. It would create a “Workforce Development Council” comprised of the heads or former heads of many powerful state agencies (Education, Commerce, the technical colleges, DEW, CHE). In addition to gathering a plethora of data and regularly evaluating existing state workforce training, the Council would be charged with creating a state comprehensive plan for workforce training and education, and developing a plan to ensure there is an adequate number of health care workers. The bill, among many other things, would create programs called “Pathways to First Careers” and “Pathways to New Opportunities,” tasked with subsidizing career training programs for students and adults.
These bills fall just shy of direct central planning. What’s truly shocking about them, however, is that they are utterly routine. Bills like this pass every year, and have been passing into law for decades.
While lawmakers may believe they’re doing the right thing by creating countless programs aimed at “job creation,” in practice they are stifling creativity, discouraging innovation, and making entrepreneurship harder. Businesses that can’t afford the steep costs of licensing and regulatory requirements will fail, while larger, more established – and more favored – businesses will flourish. In the end, these policies result in fewer choices for consumers and fewer opportunities for entrepreneurs.
The right not to join a union is a fine thing. But South Carolina has much further to go in pursuit of the freedom to work.
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S.105 and companion bills S.570 and H.3716 are all attempts to enact a policy of “constitutional carry.” If passed, any of the bills would make South Carolina the seventh state to legalize constitutional carry. Maine became the sixth state to do so on July 8.
Anyone over 21 who is legally allowed to own a handgun in the state would be able to carry that handgun in public either openly (in plain sight) or concealed, without the requirement of a concealed weapons permit (CWP). (See our fuller analysis of the issue here.) Citizens who still want to obtain a CWP in order to carry in other states that have reciprocity with South Carolina would still be able to do so. The bills would still allow businesses or other property-owners to restrict weapons on their premises if they have legally posted a sign stating the prohibition (“No Weapons Allowed”). And the bills would still prohibit carrying a weapon into the residence or dwelling place of another person without the permission of the owner.
S.105, S.570, and H.3716 are all full constitutional carry bills. These bills stand in contrast to H.3025, which would allow for the unlicensed carrying of a concealed firearm, but would continue to forbid citizens from openly carrying handguns. That would probably be an improvement over existing law, but it falls short of constitutional carry. H.3025 was drafted as a bill to expand the number of states from which South Carolina would recognize a concealed carry permit; it was later amended on the House floor, on motion of Rep. Mike Pitts (R-Laurens), into its current form. Earlier in the same day, Rep. Jonathan Hill (R-Anderson) attempted to amend H.3025 to bring it line with the above mentioned constitutional carry bills. But that attempt failed.
In any case, S.10, S.507, and H.3716 would all help to restore the promise of the Second Amendment in South Carolina. To keep and bear arms is a right afforded by the U.S. constitution, not a privilege afforded by local or state governments, and it should not be prohibited outright or made conditional by requiring permits and fees. And as a practical concern, there is precious little evidence suggesting that gun control measures have ever helped to reduce violent crime. In considering any policy to limit the purchase or carrying of firearms, therefore, the presumption should be one of liberty.
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Of the rights enumerated in the U.S. Constitution, few have been contested as fiercely as American’s Second Amendment right to keep and bear arms. Throughout the nation’s history all manner of governing bodies have crafted laws intended to facilitate either expansive or restrictive implementations of this right. The Columbia City Council recently added to this history when it passed an ordinance prohibiting the carrying of a firearm (except by law enforcement) within 250 feet of the South Carolina State House grounds for a period of 30 days.
At the time the ordinance was passed, the State House grounds and surrounding areas were attracting crowds far in excess of the norm. Protestors were regularly present, some advocating for the removal of the Confederate battle flag flown in front of the Confederate memorial, and others advocating for its retention, the presence of the flag having once again become controversial after the deaths of nine African American South Carolinians in Charleston at the hands of a racially motivated killer.
City council members believed (as stated in an ordinance) the protests at the State House grounds constituted extraordinary circumstances and justified an emergency ordinance to preserve “public safety, free speech and freedom of peaceable assembly.”
Councilors may have believed a weapons ban would create a safer environment, but they failed to take into account the proper limitations of their powers. Passing this ordinance not only contributed to a history of Second Amendment regulation, but also to a history of South Carolina lawmaking bodies ignoring the law when it suits their purposes.
No state municipality, including the City of Columbia, possesses the power to impose restrictions on firearms that go beyond those imposed by the state legislature. It therefore didn’t take long for a citizen to file a suit challenging the ordinance in court. Lexington resident Walid Hakim filed a lawsuit July 16 – one week after the ordinance was passed – challenging its constitutionality. Within a week, the Attorney General’s office – upon request by Senator Ronnie Cromer (R- Newberry) – issued an official opinion on the ordinance’s constitutionality.
Without commenting directly on the merits of Mr. Hakim’s lawsuit, the Attorney General’s office made clear that, in its opinion, the ordinance was unconstitutional.
The reasoning behind the opinion is easy to follow. The “home rule” amendment of the state constitution – article 8, section 14 – states that local governments, when enacting provisions, shall not set aside, among other things, state law concerning “criminal laws and the penalties and sanctions for the transgression thereof.” This section of the constitution has been interpreted by the South Carolina Supreme Court as prohibiting local governments from imposing greater or lesser penalties than those imposed by state law (City of North Charleston v. Harper), and from criminalizing conduct that is legal under state law (Foothills Brewing Concern. Inc. v. City of Greenville).
The Attorney General’s opinion points out that the city council’s emergency ordinance violates both of these tenets. By prohibiting concealed weapons permit (CWP) holders from carrying firearms within 250 feet of State House grounds, the ordinance criminalizes conduct that is legal under state law. And the penalty for carrying a firearm in the restricted area is less than the penalty imposed by state law for unlawful carry of a firearm.
Further, the emergency ordinance directly violates another state code section, 23-31-510, prohibiting the governing body of “any county, municipality, or other political subdivision” from regulating or attempting to regulate “the transfer, ownership, possession, carrying, or transportation of firearms, ammunition, components of firearms or any combination of these things.”
Finally, the Attorney General’s opinion suggests the emergency ordinance violates the Second Amendment to the U.S. Constitution as interpreted by the U.S. Supreme Court in McDonald v. Chicago. The AG’s opinion does not expand on this point, but in McDonald the Court ruled that an individual right to keep and bear arms is one of the rights protected against state infringement by the Fourteenth Amendment to the U.S. Constitution. McDonald concerned a law that completely prohibited the ownership of firearms within Chicago; it’s unclear if the precedent would apply to a law prohibiting the carrying of a firearm in a far more limited area of public space.
One case that may give some insight is Moore v. Madigan, in which Judge Richard Posner of the Federal 7th Circuit Court of Appeals ruled that a prohibition in Illinois law on carrying a firearm in public was unconstitutional. Judge Posner believes laws prohibiting carrying of firearms in public violate a general right of self-defense. But as in the McDonald case, Moore concerned a broad prohibition (the carrying of firearms in public), and not a more narrow prohibition as was imposed by the City of Columbia in its emergency ordinance. It’s also worth noting that other courts, such as the Third Circuit Court of Appeals, have upheld highly restrictive firearm laws, such as a New Jersey law requiring citizens to demonstrate a “justifiable need” before they can receive a permit to carry a weapon outside the home. These two opinions seem to contradict each other and the U.S. Supreme Court has yet to resolve this split among the circuits.
Given this split, it cannot be said definitively that Columbia’s ordinance violated the federal constitution. But at the very least it is highly questionable whether it is compatible with the Second Amendment.
What’s absolutely clear, though, is that no government should have the power (or, in this case, perceived power) to strip citizens of their rights simply by declaring an emergency or extraordinary circumstances. Even if a government body is correct in assessing a situation as an emergency, it’s precisely during these times that citizens most need their rights.
Law-abiding citizens should not be disarmed and deprived of their right of self-defense because of possible violence from bad actors. The U.S. District Court for the Eastern District of North Carolina recognized this fact in 2012 when it struck down a North Carolina law that allowed a ban on public carry of firearms during a declared state of emergency. According to Judge Malcolm J. Howard “it cannot be overlooked that the statutes strip peaceable, law-abiding citizens of the right to arm themselves in defense of hearth and home, striking at the very core of the Second Amendment.”
Once the Attorney General’s opinion was issued, the city council was quick to walk back its actions. The city council voted on July 21 to repeal the ordinance, thereby ending the weapons ban prior to the scheduled expiration date. The change in policy doesn’t seem to have been accompanied by a change in mindset, however. Following the repeal, Columbia Mayor Steve Benjamin was quoted as saying “city leaders … felt they did the right thing regardless of any criticism.”
The problem isn’t confined to municipalities. The General Assembly routinely passes laws without exhibiting any evidence that lawmakers have considered the legislation’s conformity to either state or federal constitution. This year, for instance, lawmakers nearly passed an “ethics” bill that would have violated first amendment rights by regulating protected speech, and tax hike that would have flagrantly violated the state constitution by raising revenue through a Senate bill. The state, indeed, may be worse offender than any municipality, since state lawmakers unilaterally appoint the judges who deciding their laws’ constitutionality.
The assumption on the part of local and state lawmakers that “we want to do it” is the same as “it’s legal” and “it’s constitutional” ought to be challenged at every point. Mr. Hakim’s lawsuit accomplished that end in this case. Other ways of challenging the assumption ought to be explored as well.]]>
Companion bills S.862 and H.4329 would stipulate that a third party that makes an accommodation reservation and accepts an accommodation charge is liable for the payment of accommodation taxes. That “third party” could be a rental agent, an online travel company, or a short-term rental listing service.
These bills have two main purposes: first, to increase the revenues flowing to government via the accommodation tax; and second, to remove some of the competitive advantaged enjoyed by companies like Airbnb, an online listing services that facilitates homeowners providing short term rental space to visitors or tourists.
It will come as little surprise that the hotel industry is pushing these bills, and that, according to the Post and Courier, “the South Carolina Restaurant and Lodging Association ‘worked with lawmakers’ on the legislation.”
This isn’t the first attempt to crack down on non-traditional accommodation providers. A bill creating a partnership between the Department of Revenue and local jurisdictions in order to enforce the payment of accommodations taxes on renters – the legislation included a fiscal penalty for renters who failed to pay accommodations taxes – was signed into law by Gov. Nikki Haley last year. These new bills are no doubt intended to make tax enforcement easier by collecting taxes from larger central entities (like Airbnb) rather than individual renters.
Whenever the state imposes cost on an industry, whether those costs are in the form of taxes or regulations, the new costs will almost always benefit larger, more established companies. Large established firms will be more able to bear state imposed costs than their less established entrepreneurial competitors: thus state-imposed costs on an industry will usually increase or secure the market share of already dominant businesses.
If South Carolina governments want to see an open and competitive accommodations market that best serves consumers, there is a better way to achieve that goal than by ramping up tax enforcement. A far better approach would be to abolish accommodations taxes (much of the revenue from which goes to tourism promotion – properly a private responsibility) and allow all accommodation providers to compete in an unhindered market.]]>
Companion bills S.862 and H.4329 would stipulate that a third party (rental agent, an online travel company, or a short-term rental listing service) that makes an accommodation reservation and accepts an accommodation charge is liable for the payment of accommodation taxes. These bills have two main purposes: first, to increase the revenues flowing to government via the accommodation tax, and two to remove some of the competitive advantage companies like Airbnb (online listing services that facilitate homeowners providing short term rental space to visitors/tourists) currently have over more traditional accommodations providers like hotels.
It should come as little surprise that the hotel industry is pushing these bills, and according to the Post and Courier “the South Carolina Restaurant and Lodging Association “worked with lawmakers” on the legislation”.
This isn’t the first attempt to crack down on non-traditional accommodation providers. A bill which provided for the partnership of the Department of Revenue and local jurisdictions in order to enforce the payment of accommodations taxes on renters- and which included a fiscal penalty for renters who failed to pay accommodations taxes – was signed into law last year. These new bills are no doubt intended to make tax enforcement easier by collecting taxes from larger central entities (like Airbnb) rather than many individual renters.
Whenever the state imposes cost on an industry, whether those costs are in the form of taxes or regulations, they will tend to benefit larger more established competitors. Large established firms will be more able to bear state imposed costs than their less established entrepreneurial competitors, therefor state imposed costs on an industry can have the effect of increasing/securing the market share of already dominant businesses.
If South Carolina governments want to see an open and competitive accommodations market that best serves consumers, there is a better way to achieve this goal than ramping up tax enforcement. A far better approach, would be to abolish accommodations taxes (much of the revenue from which goes to tourism promotion, a properly private responsibility) and allow all accommodation providers to compete in an unhindered market.
Sometimes an innocuous-sounding bill strikes at the heart of what it means to foster a well-functioning representative democracy that protects individual rights. That is the case with two bills currently in the South Carolina legislature.
First, some background. Secure and enforceable property rights are the cornerstone of any stable economic system. The absence of clearly defined and defensible property rights discourages production and investment and thus hinders economic growth. On a personal level, allowing the arbitrary seizure of property hinders the ability of individuals to improve their own wellbeing through the acquisition and improvement of property.
Defenders of free markets have therefore opposed the power of eminent domain – the process by which government grants itself or a private entity the ability to seize the property of a third party for uses government defines as appropriate. The Policy Council likewise opposes this power, but we would add that as long as it’s permitted, it should come with significant restrictions. As long as we have eminent domain, takings should only be allowed for the purpose of public use. In this case, public use means projects that are publicly owned and made open and available to all members of the public, such as roads and parks.
The South Carolina Constitution says that private property must not be condemned unless the condemnation is for public use, but the phrase “public use” is undefined. The lack of definition opens the law to abuse. Thus state law gives the power of eminent domain to many private companies considered to be “public utilities” (telephone companies, electric lighting and power companies, water supply companies, pipeline companies, and canal companies). It has been successfully argued in the courts that a taking by a public utility – private company though it is – constitutes a “public use” even if the services of the utility are only available to a fraction of South Carolina’s population.
Two companion bills, H.4326 and S.868, would allow eminent domain to be exercised for the benefit of companies constructing pipelines for transporting petroleum products. The bills would require a petroleum pipeline company to receive certificates and permits from the Public Service Commission (PSC) and the Department of Health and Environmental Control (DHEC) before exercising the power of eminent domain. But the most significant aspect of these bills is the granting of powers unsanctioned by existing law.
In fact, a recent opinion from the Attorney General’s office held that under current law eminent domain cannot be exercised for the purpose of petroleum pipelines. According to the Attorney General’s Office, the placement of the statute granting eminent domain powers to pipeline companies into a section of the code dealing with public utilities, together with the legislative history of the act – the act was created after a court case concerning the eminent domain powers of a natural gas pipeline company – both indicate the law wasn’t intended to extend to oil pipelines. The Attorney General’s Office further pointed out that a South Carolina court has never held an oil pipeline to be a public utility, and that there is no history of decisions classifying the services of an oil pipeline as a “public use.”
Even if we consider the operations of a public utility to meet the classification of a public use, an oil pipeline clearly fails to meet the standards of a public utility. Giving oil pipeline companies the power of eminent domain would allow private property to be seized against the will of its owners for the benefit of a private company. This is precisely the opposite of what South Carolinians intended when, in the wake of the Kelo Supreme Court decision, they approved an amendment to the South Carolina constitution prohibiting takings for any purpose other than public use.
Citizens have a right to be secure in their property. That oil pipeline companies “need” private land does not afford them the right to take that land without the owners’ consent. Allowing them to do so is both unjust and arguably unconstitutional.
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