New ESC audit raises senators’ ire

February 5, 2010 by senatormcconnell

Another troubling audit of the state Employment Security Commission, this time dealing with financial issues, has raised the urgency among lawmakers to change the leadership at the embattled agency.

Meanwhile, one of the three commissioners of the agency, saying she is “embarrassed” at what has happened, agreed the agency needs reform.

“I am totally embarrassed,” Commissioner Becky Richardson told The Greenville News about the audit. “That was a lack of adequate personnel in place. It was the wrong people in place and allowing them to continue and giving them raises. It was baffling to me that was allowed to happen.”

Elsewhere on the unemployment front, a Democratic gubernatorial candidate proposed lawmakers enact a one-year tax rebate for employers who hire the unemployed.

Dwight Drake said his proposal would only be offered to those who have been on unemployment rolls for at least eight weeks and would be revenue neutral because it would be rebating taxes that would not have been collected anyway.

The idea is similar to one by Senate Majority Leader Harvey Peeler that was passed by the Senate last year and sits in the House. The state’s Board of Economic Advisors estimated Peeler’s bill would cost the state more than $170 million in a year.

The Employment Security Commission has come under fire for more than a year after legislators discovered the state’s unemployment trust fund, which once held $800 million, became insolvent. A performance audit report released last month noted a number of management problems at the agency and issues affecting the trust fund, including paying $170 million over three years to workers fired for cause.

The state has borrowed almost $800 million from the federal government as a result of the trust fund’s insolvency, loans that will eventually translate to a loss of federal tax credits for employers statewide if the money is not paid back by the state by September 2011. Officials expect the total amount borrowed to top $1 billion because of the state’s swelling unemployment. South Carolina’s unemployment rate stands at 12.6 percent, the fourth highest in the nation.

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