Restoring the economy: What the state government can do

Editor's note: First, let me be clear that this post and the subsequent post about what the federal government can do are overviews. Each aspect proposed deserves individual posts, and will get so over the next few weeks. That said, enjoy, comment, criticize and condemn as you will. At the least the crackerjack staff of Voting under the Influence is offering something to talk about on perhaps the most important issue of our time.

While is seems from major media reports that the state are helpless as the economic crisis unfolds, there are some things that South Carolina can do to make itself more economically viable in these times.

First, South Carolina has to restructure its state tax system. First, South Carolina has to move towards a more consumption based tax. That might seem unwise in these times, but it is feasible if several points are considered. First, there is a considerable amount of people who do not pay any tax, be it through their illegal status or through their accountant's careful moves. A shift to a sales tax based income removes that. It does included bringing back the sales tax on food, but that is offset by other tax cuts that would benefit those who people think things like the food tax would hurt.

To counter the consumption tax increase, South Carolina should first eliminate corporate income taxes and begin a plan to phase out individual income taxes. The elimination of corporate income taxes would bring businesses here to South Carolina to operate and make it easier for businesses already in South Carolina to say open. That puts money in the working folks pockets via jobs and with a job, the average working man can pay the consumption tax. As it stands, if a business is ran out of or stays away from South Carolina due to the corporate income tax, workers have no jobs, and have no money to pay any taxes. Instead, the state has to spend money on them. It is simple math. The more businesses operating in South Carolina, the more jobs. The more people with jobs, the more they can buy things and pay a consumption tax. It is fair, it is workable, and it is needed.

However, tax policy alone will not get the job done. South Carolina has a problem in that its work force is not skilled. Of course there are pockets of skilled workers in this or that region, but the problem areas can not draw any jobs until their workforce is better skilled. That is why South Carolina should invest in adult education. Things like getting a degree in art history are not what is to be considered. However, real training in how to run a respectable high skilled job with relative high pay should.

It's not popular. Both the "choice" side of the education argument and the pro-establishment side argue about children. However, to get jobs now to South Carolina that pay a living wage, it is adult education that matters.

Indeed, if the legislature saw fit to fund all the private tuition tax credits available or all the money available for public schools, it would not have near the effect of a relatively well educated parent in the home who is proud of his or her high labor skills. That parent could actually help his or her child with homework and make choices. That parent could provide that child with a decent home. Without that skilled or educated parent, neither sides proposals make a difference in the long run.

That said, educating the workforce and reform tax policy is not enough. South Carolina needs a coordinated voice in economic development. The Department of Commerce has its detractors and rightfully so. However, to be fair to the folks at Commerce, they operate in a mishmash system. In South Carolina, there is the Department of Commerce on the state level, county level economic development efforts and municipal level economic development efforts. Far too often political considerations at all three levels lead to mixed communications with potential employers. The problem is easy to see, and the solution is admittedly hard to see. However, for South Carolina to survive this economic crisis and begin to find a way to thrive, there has to be some coordination of communication in economic development pitches. There are some in local government who wish that there was no Department of Commerce to get in their way. There are some who blame local efforts for the failure. Who knows who is right? But, one thing is certain. The constant miscommunication hurt South Carolina and keep jobs from coming here that otherwise would.

Other ideas such as tort and worker's compensation reforms are making their way through the legislature. That is a good thing. But, without the above three matters being addressed, such measures are likely not to do much to stimulate the economy. Of course, any moves towards making South Carolina better for business calls for something that might be impossible. To do the things necessary, both the Governor and the legislative leaders will have to grow up a bit, check their egos, and work for South Carolina instead of their pet agendas. Of course that is a lot to ask for them, but in these times, the people of South Carolina deserve no less.