Each issue I promise you an insider’s perspective of what is occurring at your South Carolina Statehouse, and this month is no different. I will bring you—as Jim McKay so famously opened each ABC Wide World of Sports’ episode with—“The Thrill of Victory and Agony of Defeat” at the S.C. State House.

There was no greater thrill than the news we heard around the state on a fall day in October 2009 when Boeing announced it would build a Boeing 787 facility in Charleston. Officials say this announcement is as great as the BMW 1992 announcement. The headline in the Seattle Times that day read, “Boeing Chooses Charleston: What Went Wrong.” The agony felt in Washington State countered the immense thrill for Sandlappers to the tune of thousands of new jobs and millions in new capital investment. The Senate, House, Governor’s Office, Department of Commerce, and private sector officials, such as those with the Nexsen Pruet Law Firm, pulled together to bring a huge win for the home team.

The legislation to lure Southwest Airlines did not hold the same fate, though it was a victory in and of itself at the end of the day. Charleston and Upstate officials pulled together to attract the low cost airline to each respective region and it did so without any legislative incentive. When the bill faltered in the Senate, the Upstate folks retained a high-powered Columbia lobbying firm in the eleventh hour to pass the legislation. Interestingly, the Midlands business community hired another high powered lobbying firm to fight the legislation. In the end, neither was needed as Southwest circumvented the need for any State House legislative incentive package and announced it was coming anyway.

Greenville Spartanburg Airport Executive Director Dave Edwards did a fine job, with the help of some Upstate House members, to get the $15 million incentive package through the House. Unfortunately, they fell to the same fate as many other wellintended bills in the Senate. But, as the saying goes, all’s well that ends well, at least for the Upstate and Charleston.

Like the Southwest incentive legislation, the bill to lure Bass Pro Shops stumbled and ultimately languished. But, unlike Southwest, Bass Pro Shops has yet to announce its move to the Upstate. The bill, supported by most Upstate legislators, moved easily though the House Ways and Means Committee, only to hit snags in full House debate. Employment Security Commission Reform and paying back the Unemployment Insurance Trust Fund to the tune of $900 million was probably the biggest issue facing the business community this year.

In a year when Sanford faced mounting criticism, he found an issue that he could be proud to hang his hat on. The Governor last year used his bully pulpit to rightly shine light on the draconian problems at the Employment Security Commission by refusing to accept a federal loan to cover the insolvent trust fund until the last minute. But, with his point made, the Legislature went to work to correct the embarrassing Commission’s problems, such as paying claims to people who had been fired for cause (drugs, tardiness, stealing). The Governor signed the bill this spring. The Commission, which was more or less a check-writing institution for the unemployed, now will be charged with connecting the unemployed of the state to available South Carolina jobs.

Unfortunately, ESC Reform did not solve all of the problems. The final chapter in reforming this system was to determine how to pay back the Unemployment Insurance Trust Fund deficit of $900 million. Just prior to the adjournment, the Legislature agreed that businesses would shoulder the responsibility of paying back the insolvent trust fund in the next seven years.

One of the most hotly contested issues for the better part of a decade was whether or not to pass a significant cigarette tax increase. Last session, the House and Senate passed the increase, with the Governor vetoing the bill, killing it. This session, the House and Senate overrode the Governor’s veto to increase the cigarette excise tax to 57 cents. The Senate narrowly overrode Sanford’s veto, with 12 voting to sustain his veto, while the House more handily passed it with only 29 House members voting to sustain the Governor’s veto. This increase will take effect July 1 of this year.

To wrap up, the budget continued to remain an issue, mostly because the state’s decreased revenue from last year. Word from legislators is that next year the state may reach crisis proportions in terms of money it doesn’t have to sustain education, healthcare, law enforcement and the like. We’ll have to see what plan Chairmen Leatherman (Senate) and Cooper (House) come up with to meet the needs of the state.

Tort Reform, a perennial issue, will have to wait another year. Even with Senator Larry Martin’s efforts, the House and Senate will have to take this issue up again when they return in January.

Lastly, the voters this fall will see on the General Election ballot a provision that could change the state’s Constitution by guaranteeing the rights of workers to a secret ballot election when voting in a union election. Championed by Representative Eric Bedingfield, this bill combats the Federal legislation, called the Employee Free Choice Act. This bill, too, would further South Carolina as a right to work state.

If you haven’t followed the story of Alvin Greene, you should. In essence, the story goes like this: Greene filed as a Democratic candidate for DeMint’s seat in the U.S. Senate. He bought no yard signs, he showed up on no TV commercials. He didn’t campaign, stump or otherwise even appear in public. (Although he apparently WAS doing some type of person-to-person meet and greets, thus his felony charge.)

Still, he beat his opponent with 59 percent of the vote.

What does this mean for you? Well, whether you are a large corporation or a small business, it should tell you one thing:

If you aren’t marketing yourself, and marketing yourself well, you could very easily be beat by a nobody.

Okay, so maybe “nobody” is a harsh term here, but the truth is that many businesses eschew a marketing and PR plan because “money’s tight” or “it’s the easiest thing to cut.” I can’t tell you how many times I’ve heard those — and many other—excuses. Many companies think themselves so far ahead of competition, or maybe even exempt from it, that marketing is the first cut. Advertising? Gone. Strategy? Gone. Social media presence? Takes too much time. Website? We’ll do it later.

Well guess what? While you are fading off into the noise, the general public (who now doesn’t know you from the next guy) is not getting a Top-of-Mind *ping* on your company when they need your product. Nope, they are simply picking up the phone book and dialing the first name on the list.

So, unless your name starts with an “A”, I’d suggest you re-evaluate where you are going.

May 5, 2010

From the Statehouse this week…

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April 26, 2010

From the Statehouse this week…

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In the last edition of our political commentary, I talked about how regular, everyday folks were tired and frustrated at the anti-job growth legislation coming down from D.C. and how those people, who typically refrain from exposing themselves to politics, were getting engaged in what policy makers were doing.

This frustration spilled over in Massachusetts.  A once apathetic electorate became mobilized in the recent Massachusetts Senate election between Scott Brown and Martha Coakley.  Brown, an anti-establishment Republican, was once an underdog who had no chance of contending with Coakley, a Democrat in a Democratic state who was planning to replace one of the most liberal Senators, Ted Kennedy.

At the end of the day, as expected, the Democrats voted for Coakley and the Republicans voted for Brown.  What did surprise many is the large turnout of independents in the election—independents who historically were absent from such elections.  But not this one.  Massachusetts independents voted two-to-one for Brown.  They came out and collectively said, “we need to go in a different direction.”  What they probably didn’t realize is that they not only changed the course of politics in their own state, but they may have changed the direction for the entire country.

I also talked about the anti-economic growth policies that had a good chance of passing through Congress—certain provisions in the Healthcare bill, as well as Cap and Trade and the Employee Free Choice Act.  With the election of Scott Brown to the Massachusetts Senate (instead of Coakley, who would have certainly stood behind Senate Majority Leader Harry Reid), those anti-economic growth policies have been stopped in their tracks.

Healthcare

Though the majority of Americans believe the nation’s healthcare system needs to be revamped, the majority of Americans did not believe Congress’ healthcare bill was the answer.  Before the Massachusetts’ election, the healthcare bill was a certain shoe-in to pass.  Now, not so much.

Though the healthcare bill could have provided healthcare for more Americans, it would have done so at the cost of jobs.  The bill forced employers to provide healthcare for their employees, whether they could afford it or not.  This provision alone would have been a tremendous burden on business and, ultimately, a job killer.  Additionally, the healthcare bill did not address lawsuit abuse, nor did it address competition, such as allowing consumers to purchase healthcare beyond their state’s borders.

Now that Brown has been sworn in, the Senate may not have the votes to pass healthcare as defined by Congress last year.  As seen with Obama’s proposal in early March, Congressional Democrats will be forced to work across party lines to put together a healthcare package on which both Democrats and Republicans agree in order for anything to pass.

Employee Free Choice Act

Before the Scott Brown triumph over Coakley, this bill had an opportunity to pass through the Senate. Now, it will be much more difficult.  A bill that unfairly favors unions will be three or four votes short of passing the Senate.  The bill would eliminate secret ballot elections, it only would require 51 percent of the employees to participate in the union election, and it would force businesses to negotiate its contracts with DC bureaucrats—even for private businesses in right to work states.

Prior to the Brown win, the Senate was two votes short of a filibuster-proof vote to pass this bill. Now, they are three votes short—a huge differential inside the Beltway.

Cap and Trade

Americans overwhelmingly believe that industry has a responsibility to protect the environment.  But, Americans aren’t sure that forcing American companies to implement standard carbon emissions that put the country’s companies at a huge competitive disadvantage is the answer.  Even here in South Carolina, jobs could be at risk if this bill passes.

According to the American Legislative Exchange Council, if Cap and Trade passes, “It will negatively impact South Carolina’s economy by raising energy prices and reducing household income. South Carolina would be the 43rd “Biggest Loser” in the country. According to the Heritage Foundation, between the years 2012 and 2035, South Carolina would lose each year an average of 18,572 jobs, $3.49 billion in gross state product or about $726 per person.”

With Brown opposed to Cap and Trade, the Senate Democrats will be forced to horse trade some provisions with the Republicans to have an opportunity to pass this bill.

At the end of the day, what the Massachusetts voters did was more than just change their own destiny; they may have changed the direction of the entire United States government.

Thanks to Bryan Jeter from Lister, Jeter, & Lloyd CPA’s who schooled us on Tax 101 as part of the Greer Community Chamber Convention. For more information on tax related subjects, be sure to consult with a professional.

Here are some key points that we learned about taxes:

• Keep track. Have an eye on your taxes throughout the year. One thing that Bryan hates having to say to a client is that they have to pay $10,000 to the IRS next week. Keeping tabs on your taxes doesn’t change the amount you have to owe, but you’ll be able to tell in June what you will owe in April. At least you will know what you will have to pay, so maybe you could scale down a little during the year. Don’t take that trip around the world and 86 the remodel of your home.

• You can still get good tax cuts on buying energy efficient products in 2010, but not as much as you would for the tax year of 2009. If you buy solar panels or geothermal heating elements, tax credits could take up to 30% off of your purchase, making that break-even analysis more toward your favor.  Also, there is a good tax credit for buying an electric vehicle. These tax cuts don’t justify the purchase in itself, but if you were going to purchase a car or already looking for a new energy source, green is the way to go.

• Under the new HIRE Act, if you hire an employee in 2010 that had been unemployed for at least 60 days, you’re eligible for a tax credit. If you continue to employ that person for a year, you get an additional tax credit of $1000. This is a brand new tax credit that goes into effect this month, and it’ll give employers more incentive to help your community by employing those who currently don’t have a job.

Through new litigation going through the United States Congress, personal income tax is dramatically changing, and the tax cuts of earlier in the decade will expire after last year. For more information on the changes, sit down with a tax preparer, and they’ll be able to talk you through what’s coming up.

March 29, 2010

From the Statehouse this week…

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March 22, 2010

From the Statehouse this week…

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March 15, 2010

From the Statehouse this week, legislation that guarantees secret ballot in union elections ends up in voters’ hands; the Senate spending limits bill; and the House Ways and Means committee begins debating the budget.

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March 8, 2010

This week, from the Statehouse: Secret ballot legislation fails; Upstate legislators vote to create unions; House passes tort reform bill and the economic development bill.

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