January 2014 marked the second regular session of the 120th South Carolina General Assembly. The South Carolina Manufacturers Alliance, the state’s only voice primarily devoted to manufacturing, will once again pursue a pro-manufacturing, pro-business legislative agenda. The top priorities include:
Ensuring South Carolina has an available, prepared, and ready workforce is a vital component of the state’s economic development efforts. Across the United States, 67% of manufacturers say they are facing moderate to severe shortages in workers and 64% say the shortage of skilled workers makes it harder to expand operations and increase productivity.
From January 1, 2010 – December 31, 2011, over 230 manufacturers committed to investing $8.4 billion and creating over 24,000 jobs in South Carolina. South Carolina must be prepared to meet these workforce needs, and SCMA is actively pursuing several initiatives to accomplish this goal.
SCMA supports a $6.5 million state budget request for an initiative to create a statewide program through the technical college system for students to obtain the Manufacturing Skills Standard Council (MSSC) certificate. The program, which is modeled after the National Association of Manufacturing (NAM)-endorsed MSSC for both Production and Logistics, will educate and prepare a portion of South Carolina’s workforce for entry-level positions in manufacturing by centering on six major themes: employability skills, academic skills, processes and production, maintenance awareness, quality and continuous improvement, and safety.
Work Ready Community
The SCMA is a partner in the Work Ready Community initiative. Developed by ACT, a Work Ready Community is a measure of the quality of a county’s workforce based on four criteria - high school graduation, soft skills development, business support, and National Career Readiness Certificate holders.
Technical College Program Funding
SCMA supports the South Carolina Technical College System’s request of $7.54 million (non-recurring) in the state budget for the readySC program. The program is one of the state’s top incentives for companies looking to locate or expand and create new jobs in South Carolina.
South Carolina will need an additional $30 billion over the next 20 years to support road and bridge repairs and maintenance, according to a recent study by the State Transportation Infrastructure Task Force. SCMA supports funding of the state’s road and bridges through state appropriations or redirecting existing revenue streams.
TAXES & ECONOMIC DEVELOPMENT
Sales Tax Exemptions
Several efforts are underway that could jeopardize the state’s sales tax exemptions, which could result in millions and millions of lost dollars to manufacturers if these were to go away.
- Bodman vs. South Carolina: The SC Supreme Court heard in December in Bodman vs. South Carolina, where the plaintiff argues that the state’s sales tax exemptions are unconstitutional under the equal protection clause. A decision from the Supreme Court is expected in 2013.
- The Fair Tax Act proposes to lower the state’s individual income tax rate by eliminating all state sales tax exemptions and increasing the state sales tax rate. The legislation was introduced in 2012 but did not become law. It is expected to be reintroduced again.
- House Republican Caucus Legislation – In 2012, the House Republican Caucus proposed legislation eliminating certain sales tax exemptions. SCMA worked with House leaders to ensure exemptions impacting manufacturers were not eliminated. The House passed the legislation in a 63-39 vote, but the Senate never took up the measure. The legislation is expected to be reintroduced in the House again in 2013.
Unemployment Insurance Taxes
In 2010, the state legislature changed the formula for setting the rates for state unemployment insurance taxes, which resulted in significant tax increases to many South Carolina businesses. The tax increase was needed to pay back over $900 million in federal loans the state borrowed to maintain the unemployment system and to maintain the system going forward; however, manufacturers and staffing companies were hit particularly hard with the new increases. The payback plan requires the state to pay off the loan in five years.
In an effort to relieve some of the burden, SCMA worked in 2011 with the General Assembly to have the State appropriate $146 million towards paying off the federal loans, resulting in 22% tax decreases for businesses. In 2012, the state appropriated $77 million to go towards relief.
SCMA continues to support tax relief for companies through state appropriations to pay off the debt.
Manufacturing Property Taxes
Manufacturers in South Carolina pay the highest property rates in the nation. SCMA supports the House Republican Caucus’ proposal to reduce the manufacturing property tax assessment ratio from 10.5% to 6%.
SC Department of Commerce Closing Fund
SCMA supports the SC Dept. of Commerce’s request of $25 million ($17 million non-recurring and $8 million recurring) in the state budget for the Closing Fund. These funds are used to recruit companies to bring new investment and new jobs to South Carolina.
ENVIRONMENT & ENERGY
In order for companies to prosper in today’s economy, businesses must be able to locate, permit, build, and operate their facilities in a timely manner. SCMA supports streamlining the regulatory process and reforming the permit appeals process to prevent unnecessary and often costly delays.
STATE AGENCY PARTNERS
SCMA supports adequate funding and specific programs of key state agencies involved in economic development including the Department of Commerce, the State Technical College System, the South Carolina State Ports Authority, the Dept. of Health & Environmental Control.