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Article published Jan 11, 2004
General Assembly: House intends to maintain its stand against tax
increases
DAVID H. WILKINS
For the
Herald-Journal
As the state Legislature reconvenes this week, we
face mixed news. The good news is our national economy is strongly rebounding,
and here in South Carolina, experts are predicting some job growth and a
stronger state economy.But it will take time for South Carolina to truly recover
from the recession of the past three years, even with a projected state revenue
growth of 2 percent. Although it's far less than at this time last year, we're
facing at least a $350 million revenue shortfall as we begin the process of
writing the 2004-05 state budget.The S.C. House of Representatives continues to
resist the temptation to cover the shortfall by raising taxes. We fought and won
that battle last year with good reason. You never tax yourself out of a
recession. As the Bush tax cuts have dramatically proven, the economy is
stimulated not by raising taxes but by slashing them.I believe the House will
hold the line against tax hikes again and write a budget that requires us to
live within our means.There are a number of tax plans again being proposed this
session. One would increase the cigarette tax while reducing the state income
tax. Others would increase the state sales tax while reducing real estate and
car taxes.It is vitally important that any acceptable plan ensure a more
equitable tax code -- one that will ultimately reduce taxes and createeconomic
growth.Instead of raising taxes, we should be focusing on creating a more
positive business environment in our state. Part of that focus means refraining
from increasing taxes, especially with the state unemployment levels at a
10-year high.But it also means building an environment where high-tech,
high-wage business can thrive through clustering and supporting research and
business startups in public-private partnerships like Clemson's Auto Research
Park.It means passing pro-economic development bills that make South Carolina
competitive for those companies willing to create hundreds of jobs and pump
millions of dollars into our state economy. At least three of these pro-business
bills already have passed the House and are awaiting approval by the state
Senate.In the next few weeks, the S.C. House will debate tort reform, another
measure imperative to enhancing our business environment.Funding Medicaid also
will be a major issue. Last year, South Carolina ranked sixth in the nation for
new dollars spent for Medicaid. Every year, this program consumes more state
dollars as it grows out of control. We must re-evaluate Medicaid, determine what
works and eliminate fraud and waste.During last year's session, the House passed
a comprehensive Medicaid reform package that does just that. This legislation is
presently in a Senate subcommittee. Raising the cigarette tax to the national
average without first requiring Medicaid reform won't create one job or fix the
Medicaid program. It will just waste taxpayer dollars.We'll also be debating the
next steps in reforming our state government. Proposals to be considered include
turning some statewide elected officers into gubernatorial appointments and
consolidating more agencies.As always, education will remain the single most
important spending priority in the Legislature. Despite massive budget
shortfalls, we have worked diligently to protect education dollars and fully
fund our state scholarship programs. Education continues to receive the largest
portion of our state revenue pie, and that won't change this legislative
session.We face daunting challenges this year, but as the economy continues to
grow, so does our optimism this may be the last year we face budget cutbacks.The
better news is we've learned from this economic downturn. We're doing more with
less in state government. This session we'll continue to limit government
spending by pushing accountability bills that would prevent future legislatures
from overspending during the good times so the lean times won't be so hard.If we
continue to hold the line on taxes while promoting a pro-growth economic
development agenda this session, South Carolina could be on the cusp of
transforming our economy and creating the kind of business environment that
creates jobs and ensures future prosperity.David H. Wilkins of Greenville is
speaker of the S.C. Houseof Representatives.