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Columbia, SC—The South Carolina Senate gave its final approval Thursday afternoon to a bill to overhaul the state Employment Security Commission. The agency has been under fire for more than a year for mismanagment, including not doing enough to warn state lawmakers that the trust fund that pays unemployment benefits was running dry.
The state has borrowed nearly $800 million from the federal government to be able to keep paying unemployment benefits, after having about $800 million in the fund ten years ago. The agency has also had computer problems resulting in duplicate or missed checks.
“What I think it’s going to mean is the better matching of people without jobs to jobs,“ says Sen. Greg Ryberg, R-Aiken, main sponsor of the bill. “I think that’s what the long-term goal is. We can’t just talk about the payments all the time. We’ve got to talk about putting people to work.“
Kevin Temple of Columbia says that’s a job the agency isn’t doing very well right now. “I’ve been out of work now for about almost two years,” he says with a sigh.
The overhaul would change the name of the Employment Security Commission to the Department of Employment and Workforce. Future governors would appoint the agency’s executive director, with advice and consent from the Senate. Now, the state legislature appoints three commissioners and the commissioners then choose an executive director.
Supporters of the bill say having the agency in the governor’s cabinet, giving the governor the ability to fire the director at will, will make the agency more accountable.
The Senate-passed bill would also put new restrictions on unemployment benefits.
“Over a three-year period of time, we spent $170 million in unemployment insurance payouts to people that were really terminated for true cause,“ Sen. Ryberg says. “This says if people are terminated for cause, and those include stealing, fighting, use of drugs while working, they’re no longer entitled to state benefits or unemployment.“
The Senate tacked its bill onto one already passed by the House, so now it goes back to the House. House Speaker Bobby Harrell tells us they’ll have to read the Senate version first, but if it’s what he thinks it is, there’s a good chance the House will go along with the Senate changes and send the bill to the governor.
The Senate’s passage of the bill came the same day the agency revealed that it had missed another withholding tax payment last year. Three weeks ago, lawmakers learned that the agency had not paid $16 million in payroll taxes for five months last year. Agency spokesman Clark Newsom says a new employee got overwhelmed with multiple changes coming from Washington and quit paying the taxes without telling anyone.
The state Department of Revenue fined the Employment Security Commission $900,000, plus $50,000 in interest. Revenue eventually waived the penalty of $900,000 and cut the interest in half to $25,000.
Now, ESC says it learned this month that it also missed a deadline to pay withholding taxes last October. It paid them in November once the error was discovered.
The agency says it now has a full-time CPA on staff to prevent similar errors in the future.