So Now it Begins – Unemployment Tax Fight

· by Herb Dew

Herb is the CEO of HTI. He founded HTI in 1999 along with John Knight and David Sewell, and remains heavily involved in the organization today.
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One of the things I will always be grateful for is having been born in the United States.  Whatever you want to say about us, we live in a country in which you can stand up and say “this is wrong” or “this needs to be changed” and we never have the threat of a repercussion or backlash of punishment. The ability to argue and debate important points is what brings about CONSENSUS and reform. Both of these are then balanced against stability and fiscal/social responsibility.

South Carolina has attracted world renowned employers because of its business friendly environment. Who benefits from a BMW moving to the state? Or a Robert Bosch Corporation employing almost 4000 in the state? All of us do. Small businesses and larger businesses. Town and cities that become the homes for suppliers and warehouses. Because jobs cascade down through the system. A Robert Bosch or a ZF Transmissions doesn’t just create the jobs in the plants…they create jobs in construction, accounting, banking, warehousing, manufacturing, landscaping, office furniture, car companies, doctors’ offices and on and on and on.

For the last 15 years our state has rebuilt itself as a pro-business state with a business friendly tax structure and business environment.

The recent SUTA tax debacle might change all of that.

I was at the meeting that begun this statewide discussion in Senator Thomas’ office. I was at the Spartanburg town hall meeting. I was at the Bosch business SUTA forum in Anderson. I have watched senate hearings on the issue and written or spoken to multiple Senators. This legislation was hastily done, rapidly implemented and is now being tested. It sounded great! Let’s give tax cuts to employers while making those who “abuse” the system pay. As company after company comes forward, we find this to be inaccurate. The “abuse” has been more on the shoulders of an inadequate Unemployment Commission and a legislature “asleep at the wheel”.

If substantial changes are not enacted soon, you will see changes subtly. A product line going to a different state or country. Layoffs or 10 people here and 10 people there. A loss of investment in new technology that affects a small IT company. Reduced charitable contributions. Wage reductions, benefits reductions, wage freezes or frozen headcount. A new company not selecting South Carolina. Unemployment ebbing

It won’t be dramatic. People won’t be screaming from the rooftops. It will be subtle. Alabama will bypass us. Mississippi. Southern states that are smart and ask new companies comparing states “before you make a decision look at the SC SUTA system”. If you lay off people when you’re down you will end up paying 3 times as much as us. We will wonder why XYZ Company selected Alabama, or Mississippi, or even Georgia.

Strong senators with a lot at stake have thrown in on this debate. As many have become informed, they have tempered or changed positions and understand the need to modify the new SUTA system. Some will step up and show that they are men of reason who can see and understand now the problems and flaws inherent in the new system. Others remain locked in a tug of war that they bought into. Character will be displayed over these next few weeks. The ability to do right by the state. To build a consensus and find a win-win. Most I believe will do the right thing. Some won’t. Some will just disagree and do so because they believe they are right. That’s what’s great about the United States. The ability to debate and listen. And then do what is best for the state.

I trust we will.

Herb Dew