12/18/2007
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Former NFIB/South Carolina State Director Jay W. Ragley (second from left) explains the benefit of state and local spending caps to members in Beaufort. |
Former NFIB/South Carolina State Director Jay W. Ragley met with a number of members during November and December to discuss government spending and property taxes. The Fiscal Responsibility Tour made seven stops around the state, in Greenville, Spartanburg, Rock Hill, Aiken, Columbia, Beaufort and Charleston.
The purpose of the tour was to discuss increases in state and local spending and how the 2006 property tax reforms have affected small-business owners.
In the opinion of many members, small business did not get relief from the 2006 property tax swap. The 2006 property tax bill eliminated almost all property taxes on owner-occupied homes. The trade-off was to increase the state sales tax to 6 percent. According to a study by economists, it is estimated that South Carolina businesses will pay $409 million in additional taxes above what they would have paid had the swap not been imposed. Other estimates are that the state will have 6,557 fewer jobs, investment will be $852 million lower and personal income will fall by $321 million.
While property taxes were cut for homeowners, government spending did not slow down. State government spending increased by 58 percent from 1997-2008 and local government spending increased by 7.7 percent from 1997-2006. Both growth rates far outpace the rate of inflation or the rate of population growth.
Ragley asked business owners if they were getting value for their tax dollars. Many members expressed frustration at not finding quality employees for their industries.
"I don't mind training people who have about 75 percent of the technical experience that I require, but I'm getting applications from people who only have 20 percent of the skills that I need," said Evelyn Perry of Carolina Sound Communications. Members said that technical schools are preparing students to attend four-year universities instead of helping to fill needed positions in the communities.
Business license fees were also a topic of contention. Several members said they felt that these fees are just hidden taxes.
A solution for many of these problems would be to enact government spending caps. State and local spending caps would control the growth of government. We believe the answer lies with tying government spending to a measure of purchasing power or an index of consumer goods and services. A baseline will need to be established to establish a typical budget year.
We have joined the Coalition Against Unlimited Spending or CAUS. The coalition advocates for the General Assembly to impose caps on government spending. Other members of the coalition include South Carolina Chamber of Commerce, South Carolina Manufacturer's Alliance and the South Carolina Association of Taxpayers.
Ragley and our members have made more than 200 legislative contacts via phone, fax, letter and in-person meetings urging legislators to support government spending caps. We will continue to push for the General Assembly to pass legislation capping government spending at the state and local level in 2008.
Note: NFIB would like to thank the staff at the South Carolina Policy Council for their expertise in providing the financial data on government spending.
If you'd like more information about our Area Action Councils, please call 803-254-1476 or e-mail Katie.Jones@NFIB.org.
