It's come to my attention, and to my surprise, that recently there has been some criticism by a very small minority of business leaders who feel Gov. Mark Sanford has not shown the type of leadership they believe this state needs to move forward.
As a small business owner, I believe this criticism is unwarranted. Consider the fact this past year, under the leadership of Gov. Sanford and the Republican-controlled Legislature, state government witnessed one of the most productive legislative sessions with regard to increasing our competitiveness in the global economy.
Despite the best efforts of some Democratic legislators who didn't see the urgency of improving our state's business climate, Republican leaders worked together and made some definite strides to improve the Palmetto State's economy.
You don't have to look any further to see how the Republican leadership has improved the business climate in South Carolina this year than the decision to cut the state's income tax rate for small businesses. Because of those efforts led by Gov. Sanford and Republican legislators, we are now beginning the process of lowering income taxes for small businesses from 7 percent down to 5 percent over the next four years, giving businesses a better chance to compete in the global marketplace.
During times of economic recession, cutting taxes stimulates the economy. South Carolina's state budget is an indicator of our economic strength. When the economy grows, individuals and businesses earn and spend more money; hence, tax revenue also tends to grow. In the not too distant past, some Democrats wanted to increase tax revenues by raising taxes, but these tax hikes would only stifle economic activity.
Thankfully, the Republican leadership rejected the call for higher taxes. Republicans didn't renege on annual property tax relief but instead made principled, tough decisions and balanced the budget. Republicans also had to fix the state's books and repay an unconstitutional $155 million deficit left over from former Democratic Gov. Jim Hodges. As reported last week, the state budget ended this year with a surplus of $300 million, a clear sign that our economy is starting to pick up steam again.
The income tax cut and balanced budget alone would have made this past year a banner year for business, but our state's Republican leadership refused to stop there. Instead, they realized that more could be done to improve our business climate.
Gov. Sanford and the Republican leadership worked together to pass comprehensive tort reform so businesses could operate without the lingering threat of junk lawsuits. Republicans also recognized that doctors and patients were being harmed by ever-escalating medical malpractice insurance rates. So Republicans passed legislation to reform the medical malpractice laws and curtail the frivolous lawsuits that drive up the cost of health care for everyone. Without Republican leadership, both proposals would have surely met defeat at the hands of the Democrats, who are bankrolled by the trial lawyers.
In a further effort to stimulate the state's economy, Republicans led the way to pass the Job Creation Act of 2005, which gives small businesses a tax break for hiring more workers. It's for actions like these that Michael Fields, South Carolina director for the National Federation of Independent Business, said, "This was probably the most historic session for small business in decades."
But small business is not the only front Gov. Sanford and the Republicans have worked on to improve our state's economy.
Industrial job recruitment has been at the forefront as well, with new announcements occurring at a consistent pace. In fact, last year the Commerce Department has secured more than $2.7 billion in new capital investment and nearly 13,500 new jobs to our state -- its best year in the past four years. This includes the announcement that an international aeronautics firm was building a plant in North Charleston to construct a large part of the Boeing 787 fuselage, as well as the development of the International Center for Automotive Research with Clemson.
The Republican team is always working to grow our economy and make sure every worker who wants a job can find a job. The accomplishments that Gov. Sanford and the Republican leadership in the General Assembly achieved this year would never have happened without the executive and legislative branches of state government working together.
I am confident that once again, the voters of South Carolina will recognize the wide difference on economic issues between the Republicans and the Democrats. As they have done in the past two elections, the voters overwhelmingly supported our initiatives on the economy, and Republicans have given them many reasons to earn their support again.