SC must seize the chance to replenish our state’s Unemployment Insurance Trust Fund

Since the beginning of the COVID-19 pandemic, nearly 560,000 South Carolinians — more than 10% of our population — have filed for unemployment. To respond to this unprecedented crisis Gov. Henry McMaster created Accelerate SC with a 30-day mission to get South Carolinians back to work as quickly, safely and responsibly as possible.

As a member of Accelerate SC’s Resources component, I am confident in the recommendations we put forth. But I believe that one of our recommendations requires the utmost urgent consideration — we must replenish our Unemployment Insurance Trust Fund, and we must do it now while we can.

Ten years ago as a state senator I worked side by side with fellow members of the General Assembly to implement reforms in what was then known as the Employment Security Commission. At the time we were in the depths of the Great Recession, South Carolina owed $1 billion to the federal government and a legislative audit had revealed that commissioners had mismanaged the agency so badly that they were even failing to pay taxes from the weekly checks of unemployed workers.

Today that agency — now known as the Department of Employment and Workforce — is in much better shape.

Over the years it has built back the Unemployment Insurance Trust Fund to a level sufficient to withstand the kind of economic downturn we are now seeing. And thanks to South Carolina’s economic growth in recent years, the Department of Employment and Workforce was even able to cut unemployment insurance taxes for seven straight years, reducing taxes on businesses by an average of 34.4% in 2019. Unfortunately, however, the COVID-19 pandemic has placed unprecedented strain on an agency that typically handles vastly fewer claims on a daily basis.

To date the Department of Employment and Workforce has paid out nearly $2 billion in various types of state and federal unemployment and emergency assistance related to the pandemic— and it will likely pay out a whole lot more before this is all over.

As a result of all this, our state’s Unemployment Insurance Trust Fund is rapidly diminishing. And if South Carolina is to continue to adequately fund it, we will have to pursue one of these two options:

▪ Raise taxes on businesses.

▪ Use some of the $1.9 billion that our state has received as part of the coronavirus-related CARES Act.

I strongly recommend the latter option.

The General Assembly recently passed a continuing resolution that gives it control over CARES Act funds. I believe that $500 million should be allocated to replenish the Trust Fund to its pre-pandemic levels, and my fellow members of Accelerate SC unanimously agree.

In addition I believe that any CARES Act dollars that have not been spent by December 30, 2020 — the date by which CARES funds must be expended — should also be used to replenish the trust fund.

Every business in South Carolina has been impacted by the novel coronavirus; many are hurting and some have closed entirely. This is not the time to be raising taxes on them. Instead we should be working to help businesses save money and put more South Carolinians back to work.

As our chief executive Gov. McMaster has demonstrated steadfast leadership amid this unprecedented crisis. I encourage the General Assembly to follow suit and make unemployment funding their first priority.

Our people are counting on it.

Former state Sen. Greg Ryberg served in the South Carolina Senate from 1992 to 2012. He served as chair of the Resources component of Gov.McMaster’s Accelerate SC task force.