S.C. businesses want a new partnership between two of Gov. Nikki Haley's Cabinet agencies to ultimately result in more jobs.
The newly overhauled state Department of Employment and Workforce and the state Department of Revenue on Monday announced a collaboration to streamline tax collections. The business community hopes the action will spur ideas and discussion about ways to help companies bounce back from the economic doldrums, especially when so many are reeling from dramatic increases they owe this year in taxes paid to the state's unemployment benefits fund.
The partnership is just developing, but the initial goal is to provide a single place for businesses to go to pay all of their state taxes and to find ways to be more efficient, according to a joint announcement from Employment and Workforce Department Director John L. Finan and Revenue Department Director Jim Etter.
The governor sees the partnership as one of many her administration will offer to help modernize government and cut down on bureaucracy, said Haley press secretary Rob Godfrey.
Sen. Greg Ryberg, R-Aiken, said the partnership itself could have an immediate benefit on lowering the rate companies pay to the unemployment trust fund, because the effort may result in cost savings. The rates, which are paid for every worker on a payroll, are recalculated every year.
The trust fund went broke in late 2008, because of the high unemployment rate and poor planning by lawmakers and government officials. Since then, the state has borrowed $978 million from the federal government. The debt continues to grow daily and comes with interest.
Lawmakers restructured the unemployment agency into the Department of Employment and Workforce, kicked out the old management and set new rates tied to the frequency that a company lays off workers. Rates for businesses with the most-frequent-layoff history increased to $1,128 a year per worker from $427.
The Senate Labor, Commerce and Industry Committee will meet Thursday to decide whether to recalculate the rates. That could result in the state taking longer to pay back the federal government, but it would provide a reprieve to companies that got socked with significant tax increases this year.
Frank Knapp Jr., S.C. Small Business Chamber of Commerce president, said he wants to make sure any change in the rates doesn't end up hurting small businesses. Small businesses tend to pay less under the new rate structure, because they typically lay off workers less frequently than larger companies, he said.
Knapp likes the partnership between the Employment and Workforce Department and the Revenue Department.
"Anything the state can do to cut through red tape, to make the taxation payment process simpler for businesses small and large, would be welcomed," he said.
Mary Graham, senior vice president of public policy for the Charleston Metro Chamber of Commerce, said the partnership could also lead to solutions to help businesses cope with the new rates. Either way, she said it is a good step.
"This makes total sense," Graham said.