Governor ends stalemate with ESC

Annabelle Robertson / The Item Sumterites seeking unemployment benefits were being advised to call the governor's office on Wednesday morning.

By ANNABELLE ROBERTSON
Item Staff Writer
arobertson@theitem.com

Gov. Mark Sanford ended a stalemate with the Employment Security Commission Wednesday, just hours before the fund that doles out unemployment payments to tens of thousands of state residents would have run dry. The governor had insisted that he would not request a federal loan to fill the unemployment coffers until the ESC agreed to a full audit and provided detailed data about benefit recipients, but he relented late morning and agreed to sign for $146 million in federal funding.

The fund weekly pays out about $14 million to 77,000 South Carolina residents.

“Everybody was real scared this morning,” said Herbert Curtis, 51, who has collected unemployment since being laid off by a linen service a year ago. “My boat was sinking, and he threw me a life preserver. And he didn’t only throw it to me, he threw it to a lot of people.”

Shanna English was one of them.

Pregnant with her second child, the Sumterite commuted every day to Columbia for her job with Verizon Wireless. She was fired 10 days ago, and came into the Calhoun Street unemployment office Wednesday to file for unemployment benefits.

“What?” she said, when asked if she was aware that no benefits would be given out if the governor did not sign the request. “No. I had no idea.”

“You can file. We’re taking claims,” said ESC Assistant Area Director Debbie Rodgers, “but nobody is going to get paid until the governor signs this.”

Rodgers said that if Sanford hadn’t ultimately requested the funds, the Sumter office would have had to ask for police security on Monday morning.

“People get angry,” Rodgers explained. “They come in here and say, ‘You people are not giving me my money’. So we’re going to need the police here to handle the crowds.”

After hearing the news that the unemployment budget would be funded, Rodgers was relieved.

“Hallelujah,” she said. “We’re all breathing a sigh of relief around here.”

Sanford had refused to sign the loan request because of a long-running dispute with the agency that handles unemployment.

“It is unbelievable that any state agency would hold such outright contempt for taxpayers and the unemployed that they would refuse to sign a very simple request for audit compliance and sharing data they already collect,” Sanford said, in a statement released to the press. “We will not punish the unemployed for this agency’s incompetence — but all working taxpayers need to realize that without reform, they will ultimately pay the price as the ESC has suggested doubling unemployment taxes from $300 million to $600 million a year. The agency has watched this fund run out over six years and has done nothing to prevent it. That, coupled with the fact that they’ve repeatedly tried to run from the sunlight an audit would bring tells us they have something to hide. If these Commissioners do not provide us with the information taxpayers are entitled to, they will answer for it with their jobs.”

Sanford agreed to request the aid because he got his way when several lawmakers agreed to ask for an audit of the ESC. He also found a legal provision that he says allows him to force the commission to turn over more information about how it calculates unemployment rates.

“We will not punish the unemployed for this agency’s incompetence,” Sanford said during a news conference.

Commission Executive Director Ted Halley said he had begun to prepare his staff for the possibility that South Carolina would not be able to pay benefits.

“I was very much concerned about the safety of my staff,” he said. “You take away the last lifeline that an individual may have ... this is the only thing between them and starvation, between them and being put outdoors, and it just scares me as to what they would resort to.”



BY THE NUMBERS

More than 500 people applied for unemployment benefits at the local ESC on Monday, after the office’s four-day holiday closure, and Rodgers said that she expects another long line next Monday, after the New Year’s holiday.

She also believes that another federal loan will be necessary, after about three months.

“I haven’t seen lines like this since the late ‘70s, when I started working here. It’s the worst I’ve seen since then, and it just keeps getting worse. So yes, I do believe we’ll need to request another loan. This money can’t last forever, and it’s not like there’s a magic bullet. But hopefully, next time around, we won’t have to go through this.”

South Carolina currently has the third highest unemployment rate in the country; it stood at 8 percent in October and 8.4 percent in November.

Sumter, Lee and Clarendon counties have even higher rates, with Sumter’s estimated to be more than 9 percent at year’s end.

The state’s trust fund has been losing money for years as annual payments have exceeded the amount businesses pay in unemployment insurance taxes.

South Carolina is not the only state facing a shortfall. According to the National Association of State Legislators, five states face critical shortfalls in their trust fund accounts, with reserves of less than three months to cover benefits. Another eight have reserves of less than six months, and six states have less than a year in reserve. Three states including this one have borrowed from the federal government to meet their unemployment payment obligations during the ongoing financial crisis. The U.S. Labor Department said Michigan has borrowed more than $750 million dollars, Indiana has borrowed more than $140 million and South Carolina had already been loaned more than $13 million.

Gov. Sanford routinely questions the accuracy of the agency’s calculation of how many people in South Carolina are out of work. He has said he wants detailed reports on people filing claims and an explanation of how the unemployment rate is calculated.

Halley said collecting additional data would require him to retool his system, something he does not have the resources to do.

Sanford also wanted an audit by a state watchdog agency, which Halley has said he does not have the authority to request or refuse. Only state lawmakers can ask for an in-depth agency review, as several did Wednesday.

Sanford’s refusal to ask for more drew criticism from some lawmakers.

“You don’t hurt the people who need the money because you have an issue with an agency,” said Rep. Todd Rutherford, D-Columbia, one of the lawmakers who ultimately agreed to request the audit to appease Sanford. “This is not welfare for his rich Wall Street friends. This is money for people who have lost their jobs.”

But Sen. Greg Ryberg, R-Aiken, and one of several Republicans who also said they would request an audit, applauded Sanford for “raising the issue of transparency in regards to the operations of the” commission.



Contact Staff Writer Annabelle Robertson at arobertson@theitem.com or (803) 774-1250.

Associated Press Writers Jim Davenport and Page Ivey contributed to this report.