COLUMBIA — South Carolina Gov. Nikki Haley asked legislators in her second State of the State address Wednesday evening to reduce income taxes, further clamp down on unions, restructure government, and pass a loser-pays provision on civil lawsuits.
Her speech focused on jobs, as she recognized a dozen companies that made job announcements involving South Carolina in 2011, including Continental Tire, TD Bank, Bridgestone and BMW. Companies have announced some $5 billion in investments and promised nearly 20,000 new jobs, she told a joint session of lawmakers and others seated in the House chambers.
Those jobs are promised to come on line between now and 2020. The state’s 9.9 unemployment rate in November was one of the nation’s highest and little improved from the 10.9 percent it was in November 2010 when she won election as the state’s first woman governor.
“The good news is we’ve made great progress this past year. The bad news is we still have a ways to go,” she said. “But my pledge to each of you sitting before me tonight, and more importantly, to the 4.6 million South Carolinians outside of these walls, is that I will not rest until we’ve created a climate in which every citizen of this state who wants a job, has a job.”
To help her do that, she said, she needs legislators to focus on pro-business legislation that she says will make South Carolina more competitive.
Tax reform is critical, she said as she outlined her executive budget proposals. She wants to use extra state revenues to begin eliminating the corporate income tax, “injecting much-needed dollars back into our businesses and giving us an unbelievable economic development tool,” she said.
The first of a four-year phase-out of that tax, already among the nation’s lowest, would reduce revenues by $62 million.
The governor also wants to collapse the state’s six income tax brackets to three. It’ll cost $78 million and will save or leave taxes unchanged for eight of 10 taxpayers. More than 40 percent of tax filers pay no state income taxes. The break helps the 55 percent of taxpayers who fall in the state’s highest tax brackets and will save them $84 per tax-filing household.
Haley called South Carolina’s status as one of the least unionized states “an economic development tool unlike any other.”
She wants to require unions to specify exactly how employees’ dues are spent. By executive order, she said, she’ll bar striking workers from receiving unemployment benefits.
“We’ll make the unions understand full well that they are not needed, not wanted, and not welcome in the state of South Carolina,” she said.
She also addressed the National Labor Relations Board challenge in a fight between Boeing Co. and its machinist union in Washington state, threatening to close the new plant in North Charleston, calling it “one of the most fundamentally un-American decisions ever handed down by the federal government.”
She praised Boeing as refusing to cave, causing the NLRB to back down and drop its suit. Actually, the suit was dropped after Boeing agreed to a settlement with the union. But it became a national issue, as presidential candidates addressed it on the campaign trail.
Haley recognized a Boeing executive during her speech, and said the fight should show employers that South Carolina has their back.
“Second, for the federal government, the lesson must be that if you pick a fight with South Carolina, you better be prepared for one, because South Carolinians take care of our own,” she said. “We always have, we always will, and we will not tolerate indefensible attacks on our citizens.”
She asked legislators to complete work left over from last year, including a proposed spending cap and proposals that restructure government. That would include calls for eliminating the agency that oversees much of the state’s bureaucracy — an agency she railed against on the campaign trail — and putting its functions in a Department of Administration under her control.
She called for “truth in budgeting” by ending the practice of using one-time money to pay recurring expenses — an issue that Gov. Mark Sanford tried for years to curtail.
“Agencies have faced financial challenges and used fund balances and flexibility to shift money between accounts to cover expenses like rent and payroll,” she said. “With revenues increasing, state government needs to stop these non-transparent accounting practices.”
While she thanked legislators for passing tort reform last year, she wants to go a step further, with a “loser-pays system,” so “our companies understand that South Carolina won’t stand for trial lawyers playing games with their bottom line.”
She wrapped up her speech by addressing critics of her required phone greeting for state workers: “It’s a great day in South Carolina. How can I help you?” She said it was sparked by one caller to her receptionist.
“The goal was for state employees to feel proud of where we live and what we do, and have a constant reminder that we work for the person on the other side of the line,” she said. “What could possibly be so wrong with that?”
Democrat Bakari Sellers of Denmark gave his party’s response to the speech.
While Haley talked about putting $10 million into charter schools, Sellers said it’s time to invest in public education as a whole, which includes making full-day 4-year-old kindergarten available to all children, evaluating teachers’ performance and paying them competitive salaries.
Haley’s budget proposal would mean state workers would go a fourth consecutive year without a pay raise.
Sellers said the Republican slogan of tax cuts for the wealthy is not an economy booster. He called for investing in the state’s infrastructure, while Haley called for further restructuring the Department of Transportation by eliminating its commission and putting the agency entirely under the governor’s control.
“All across our state, South Carolina’s roads and bridges are crumbling,” Sellers said.