Ideology Pushes South Carolina Over The Cliff

Since 2003, South Carolina Gov. Mark Sanford has turned the state into a petri dish for what hard-core conservatism —slashed taxes, shrunken government, cut regulations—would look like. With a Republican-controlled legislature, he's had pretty much free rein to enact the basic policies conservatives argue would make an economy thrive. If conservatives are right, South Carolina and its residents should be weathering the recession better than most.

But they are not. They are doing worse.

"In South Carolina, we're falling off a cliff," said Donna DeWitt, the president of the South Carolina AFL-CIO and co-chair of the South Carolina Progressive Network.

Her assessment is backed up by reporting today by The Washington Post [1] and by The State [2] in Columbia, S.C.

"South Carolina has the fastest growing unemployment rate in the country, and economists do not see an end to the cycle of job losses spreading across the state," The State reported. "Between January 2008 and January 2009, the state’s unemployment rate increased 4.7 percentage points, which was the largest jobless rate increase in the country, according the Bureau of Labor Statistics." (The state's unemployment rate is now 10.4 percent.)

Sanford has made a name for himself most recently for saying he would refuse to accept money from the economic recovery bill passed by Congress last month. Earlier this week, he said that he wanted the federal government to issue a waiver that would allow him to use $700 million of the funds to pay down state debt—a debt fueled by corporate tax cuts and tax giveaways—rather than for actions that would stimulate the state's economy.

Meanwhile, as The Post reports, "The Salvation Army gets so many calls from people desperate for help with overdue utility bills that, one morning, its phone system crashed. The Family Service Center of South Carolina is deluged with clients seeking free counseling for delinquent mortgages. And the shelves at the Life Force food pantry run out of rice, canned stew meat and black-eyed peas in less than an hour."

The story cites the political decisions that set the stage for this crisis:

Sanford and the Republican-led General Assembly have cut the state's budget three times since last summer by a total of $871 million, or 13 percent -- among the deepest reductions in the nation.

The cuts have limited state agencies' ability to help the growing numbers of people in need. The state's Medicaid program, for instance, is reducing mental health counseling, cancer screening and dental coverage.

The reductions are constricting the private sector's capacity, too. The Department of Social Services has pared its contracts to nonprofit groups by an average of 10 percent, reducing funding for emergency shelters and employment training programs.

The State's Comptroller General late last year found that state corporate income tax collections are down 57 percent, sales tax collections are down by 18 percent, and individual income tax collections are down nearly 3 percent since July, according to the Tax Justice Digest [3]. State agencies have reportedly reduced their own budgets by $600 million to take into account reduced revenues. Sanford responded to the shortfall, the Digest said, with "a budget-busting list of tax changes that include eliminating the state's progressive corporate income tax and introducing an optional single rate personal income tax."

DeWitt said that while Sanford keeps saying that the private sector has to step up to the plate so that citizens are less dependent on government, "I see the opposite happening": firms taking advantage of tax breaks copiously handed out by conservative lawmakers in flush times and "spending millions of dollars fighting laws that would make it easier for workers" but not actually producing jobs.

As in other states, decisions by conservative South Carolina lawmakers to refuse to maintain a progressive tax structure that allows essential social services to be adequately funded is now forcing county and local governments to make painful, and downright dangerous decisions. In Columbia, that could mean closing three fire stations that serve an area that was the scene of two major fires in the past month, DeWitt said.

Asked what she fears will happen, DeWitt warned, "We are recreating a Jim Crow society in South Carolina with the conservative viewpoints of many of the legislators," where people of color are disproportionately represented among the economically dispossessed.

But there are hopeful signs, DeWitt said. People are seeing the real consequences of conservative government, and even a growing number of Republicans are turning their backs on the extreme right.

"The average South Carolinian does recognize that we are going to have to do something different." DeWitt said. "There are too many of us are out of work, there are not enough jobs, the very rural areas are suffering, the schools are suffering, the infrastructure is suffering."