Raising taxes not the way to help state's economy

e-mail this story discuss this issue in our forums Guest column • W. Larry Gluck: Cancer care collaboration brings many benefits to Upstate (02/04/04) • Bill McHenry : National Board Certification is public education's expensive little secret (02/03/04) • Ben Boozer: Clemson institute helps communities prepare for the future (02/02/04) • Walter Ezell: Voters should look for vision, moral authority, ability to lead (02/02/04) • Diane Smock and Buddy Puckett: County must welcome all students so none is left behind (02/01/04) More details David H. Wilkins is a Greenville attorney and speaker of the South Carolina House of Representatives. He graduated from Clemson University and the University of South Carolina School of Law, and he has served in the House since 1981 as a representative from District 24. He can be reached at HSP@scstatehouse.net.

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 South Carolina 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 create economic 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 start-ups 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 have already passed the House and are awaiting approval by the state Senate.

In the next few weeks, the South Carolina House will debate tort reform, another measure imperative to enhancing our business environment.

Funding Medicaid will also 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.

Last session the House passed a comprehensive Medicaid reform package that does just that. This legislation is currently 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.