SC Businesses Brace For Unemployment Tax Hike
JUST IN TIME FOR CHRISTMAS!
There’s a major debate brewing between Nikki Haley’s Department of Employment and Workforce (SCDEW) and its critics over the impact of this year’s elevated unemployment taxes.
Due to the exorbitant, incompetent and corrupt provision of long-term unemployment benefits, South Carolina racked up a massive $933 million tab with the federal government. Most of this debt is being repaid in the form of tax hikes on businesses, although Haley and the “Republican-controlled” S.C. General Assembly decided last year to shift $146 million of this burden directly onto the backs of individual taxpayers.
Haley’s administration claims that this tax hike will be reduced by $150 million this year – meaning that businesses will pay less in 2013. However a legislative committee chaired by S.C. Sen. Kevin Bryant (R-Anderson) disputes that contention.
“Rates for all employers in 2013 may rise as much as 12 percent or more,” a report from Bryant’s committee predicts. Furthermore, the report speculates that individual employers “may see their rates triple or quadruple.”
So … who’s right? Well, we were supposed to know by now, but once again it appears as though Haley’s administration is dropping the ball.
Two months ago, SCDEW informed businesses that their State Unemployment Tax (SUTA) rates would be mailed to them in mid-November. Earlier this month, though, the agency pushed that deadline back to mid-December. SCDEW – one of the most poorly managed agencies in state government – offered no apology or explanation for this delay.
“This hurts a lot of businesses,” one South Carolina small businessman tells FITS. “Many projects, hires, and decisions have been put on hold or abandoned due to the delay in SUTA rate notices. Businesses need these rates for business planning and our customers are putting their own business planning on hold while they wait for our numbers and prices for the upcoming year.”
While public attention has been focused in recent weeks on the rampant incompetence at Haley’s Department of Revenue (SCDOR), this agency has been an ongoing disaster from the moment Haley took office.
In fact its chronic failure has been exposed this year via a state audit, federal warning and a legislative study. Among the most damning statistics? One out of every five dollars in unemployment benefits doled out in South Carolina is awarded erroneously – the eighth-highest percentage in the nation. Not only that, South Carolinians who use the agency’s reemployment services take an average of 26.5 weeks to get off of the public dole. Those who do not use SCDEW took only 22.3 weeks to find gainful employment.
Ironically, SCDEW was the poster child for government reform after it was transferred from an unaccountable, legislatively controlled commission into the cabinet of former Gov. Mark Sanford in 2010.
Clearly, it has regressed … and South Carolina businesses and taxpayers are paying the price for that failure.