REPORT UPDATES 2012 FINDINGS …
The S.C. Legislative Audit Council (SCLAC) has released an updated “management review” of one of Gov. Nikki Haley’s worst-managed cabinet agencies – the Department of Employment and Workforce (SCDEW).
According to the review, the agency has made progress in improving the financial condition of its unemployment insurance trust fund – which now owes the federal government “only” $457 million. Two years ago the agency was $752 million in the hole – and at the peak of the recent recession it was more than $1 billion in debt.
So “yay, state government?” Right?
No … not really.
Despite Haley’s best efforts to spin this things in a different direction, this debt has been narrowed thanks to a massive tax increase on South Carolina businesses – one that’s had deleterious effects on the state’s economy.
Assuming the economy doesn’t slip into another recession, South Carolina should pay off its remaining debt to the federal government by 2015 and have $400 million in reserve funding in this account by 2017. Of course that’s only half of the $800 million it is statutorily required to maintain in the account in order to weather a “mild recession.”
In other words a massive tax hike has only succeeded in getting the state half-way toward a half-assed solution … assuming everything remains rainbows and unicorns with the national economy.