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.

Anyway …

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.