USC study provides the answers wanted

Last week, yet another publicly funded study was unveiled in Columbia, this one by the University of South Carolina on business and employment.

The story that appeared in The State, like the study itself, left one with more questions than answers.

For instance, there was no indication of what the cost of the study was or who paid for it.

For that information, you’d have to turn to the article written by my colleague at The Nerve, Eric Ward. Ward reported Tuesday that the study cost $55,000 and that the partners in the study included the S.C. Department of Commerce, New Carolina and the CTC Public Benefit Corporation.

Nearly three-fourths of the $55,000 came from public sources, Ward reported.

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SC retirement system report: lipstick vs. pig

Former Gov. Mark Sanford once described the unfunded liabilities in South Carolina’s state retirement system as a ticking time bomb. The system’s unfunded liabilities total anywhere from $13 billion to as much as $53 billion.

Whatever the number, it would appear there’s a disaster in the making because at some point, SC taxpayers are going to have to cough up the coin to cover the costs.

Earlier this week, state Treasurer Curtis Loftis attempted to delve into the retirement system’s latest actuarial report during a meeting of the state’s Budget and Control Board meeting. He didn’t get very far. 

According to The Nerve (full disclosure: my employer), the report for the last fiscal year recent arrive and the news, evidently, was not good.

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Media ‘watchdogs’ snooze the day away

The Nerve, the investigative reporting arm of the SC Policy Council, broke a story Wednesday that South Carolina Research Authority Chairman Bill Masters, tired of the obstruction and obfuscation of his fellow board members and SCRA management, plans to resign within the next few weeks.

Masters, named to SCRA’s board by Gov. Mark Sanford last year, has been met with resistance from Day One. For example, earlier this fall, Masters, citing the state’s troubled budget, voted against giving substantial raises to SCRA employees and executives.

Masters was the lone SCRA board member to vote against the proposal.

And last month, Masters called for “an independent investigation into the trustworthiness” of Research Authority Chief Executive Bill Mahoney, another story broken by The Nerve, for whom, in the interests of full disclosure, I work.

So how did the rest of the South Carolina media react to word that Masters, chairman of one of key state-run economic development agencies in South Carolina, react to word of his impending resignation. It didn’t.

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Linking college construction and tuition

So why is it that even though enrollment at most state-funded colleges and universities is at record or near-record levels, tuition has continued to skyrocket over the past decade, up 100 percent or more in some cases?

Look no further than a South Carolina law which ties a college’s tuition revenue to the amount of debt it can take on for bricks-and-mortar projects, according to this report by The Nerve.

The bottom line: the more students that schools get in their doors, the more money they can get their hands on for building.

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A Comedy of Errors, with your money

To say the S.C. Employment Security Commission has been operating in an unorthodox manner is being charitable, to say the least.

However, you can only put so much lipstick on this pig.

According to an audit released by the Legislative Audit Council Tuesday, and first reported on in detail by The Nerve, the ESC paid more than $171 million in state unemployment benefits during the last three fiscal years to “employees who were terminated for misconduct, illegal acts or other offenses.”

If that weren’t enough, in 2008, the ESC “stopped referring claimants for criminal prosecution who had fraudulently obtained unemployment benefits.” Claimants defrauded the agency out of more than $7 million in Fiscal Year 2008-09 alone, the report says.

Not surprisingly, the agency, which manages the state’s unemployment insurance fund, is struggling. The state’s unemployment insurance fund is more than $700 million in debt to the feds, and climbing. Nearly a decade ago, by comparison, the fund had a surplus of more than $700 million.

Entertaining in a Keystone Cops-sort of way are the examples of people who lost their jobs for some pretty good reasons but collected unemployment anyway, according to the report. They include:

  • “An employee made unauthorized charges on his company’s credit card, which included motel rooms, hardware and Internet dating charges. He was terminated by the company, but ESC still allowed him to collect $3,586 in unemployment benefits.”
  • “An employee was discharged for absenteeism due to his incarceration. The commission allowed him to collect $5,868 in unemployment benefits.”
  • “An employee made a job-related threat and alluded to a weapon in his car. Police found a loaded firearm in the employee’s car. He was terminated for cause, but still collected $2,440 in unemployment benefits.” 

School districts spend $$$ fighting parents

South Carolina school districts appear more interested in spending tax dollars fighting parents’ attempts to get accommodations for their special-needs children rather than providing focused instruction, according to research by Janet Frazier, a citizen reporter for The Nerve.

State school districts spent more than $33 million on legal fees, claims and settlements between FY 2002 and FY 2007, much of it related to challenges from parents who disagreed with school assessments on how to educate their special-needs children, according to Frazier’s research.

That’s particularly distressing given the financial straits South Carolina finds itself in. Last month, the state Budget and Control Board announced an across-the-board 5 percent cut that will cost schools approximately $100 million.

In September, the board chopped 4 percent, which will reduce money to school districts by $85.4 million. And those reductions come on the heels of a $131 million K-12 budget cut enacted in July.

Four school districts alone racked up more than $1 million apiece in attorneys fees between FY 2002 and FY 2007: Beaufort County, Charleston County, Horry County and Richland School District One.

During the six-year period, Beaufort spent more than $1.85 million on outside lawyers and has since rung up another $1.3 million in legal fees. In addition, Beaufort paid out $4.55 million in claims in FY 2007 alone.

Thanks to federal legislation, public schools have an obligation to provide “Free Appropriate Public Education,” which is defined as an educational program that is individualized to a specific child and designed to meet that child’s unique needs.

Essentially, what that means is that when it comes to children with disabilities, schools must provide students with an education, including specialized instruction and related services, that prepares them for further education, employment and independent living.

The combined legal fees of the four districts during the six years totaled $6.6 million, or 25 percent the all money spent on outside attorney fees by South Carolina school districts, according to information found on the S.C. Department of Education website.

Of the three remaining districts, Horry County School District spent more than $1.9 million on attorney’s fees between FY 2002 and FY 2007, Richland School District One spent more than $1.8 million and Charleston spent a little more than $1 million.

Charleston also paid out a little more than $1 million related to either claims or settlements during that period.

Much of the money paid by school district in legal fees went to three large Columbia law firms: Duff, White & Turner LLC, Childs & Halligan PA, and Tupper, Grimsley & Dean PA.

Interestingly, the South Carolina Teacher of the Year, named annually by the state Department of Education, is partly sponsored by both Duff, White & Turner and Childs & Halligan.

Hidden realities of Clunker program


Not surprisingly, the government’s Cash-4-Clunkers program brings with it unintended consequences.

Multiple car dealerships in South Carolina have reported that used car prices are already extremely high because of a diminished supply of both new and used cars, according to a report by the South Carolina Policy Council.

Some used car prices, in fact, are close to that of new cars. What it all means is that middle and lower class Americans will ultimately be paying more for used cars. Afterall, decreasing supply when prices are already high will only drive up costs for consumers.

As the Policy Council points out, while President Obama has consistently said he will not raise taxes on anyone earning less than $250,000, this program will end up costing less-affluent Americans more of their money in the long run.

“… what about the 17-year-old who worked two summer jobs to try and buy a used car? How much harder will it be for him to find something within his price range?” the Policy Council asks. “Cash-4-Clunkers may not by a tax, but an unintended consequence of the program is that it will act like a de facto levy on thousands of South Carolina families.”