Sanford trumped on payday loans, ports

June 17, 2009 by senatormcconnell

Lawmakers take some of governor’s power, will study state’s tax structure

The S.C. General Assembly overrode Gov. Mark Sanford’s vetoes Tuesday and approved a bill to study and recommend changes to the state tax structure.

Lawmakers overturned all 10 Sanford vetoes, creating laws that would limit the number of payday loans, allow lawmakers to choose those who oversee state ports, and limit where sex offenders can live.

The one-day session wrapped up work for the year, with lawmakers not scheduled to return until January.

Among the most contentious issues was a bill giving lawmakers more authority over State Ports Authority board members. Currently the governor can hire and fire commissioners at will.

Supporters of Sanford’s veto said lawmakers were trying, once again, to chip away at the governor’s authority granted by a state court decision during former Gov. David Beasley’s administration.

“It’s important for the guy in charge to make appointments, to assemble his team,” said Sen. Chip Campsen, R-Charleston. “The buck needs to stop with the governor.”

In a statement, Sanford said the law will make ports “less accountable and less transparent, and make our state less competitive.”

But those in favor of the change worried any governor could come in and sweep out the existing board, undoing years of policy planning. Ports need stability in leadership, said Sen. Larry Grooms, R-Berkeley.

In addition, supporters said, the bill pushes a new port in Jasper County and requires that commissioners have business expertise.

Though the payday lending legislation endorsed by the House and Senate two weeks ago remained somewhat in question until Tuesday, in the end, the vote to override the governor’s veto was not close.

The Senate easily overrode Sanford’s veto 39-3, after the House rejected his veto 105-4 .

Sen. Gerald Malloy, D-Darlington, perhaps the Senate’s staunchest payday lending opponent, said he could not vote to sustain Sanford’s veto, because he disagreed with the governor’s reasoning on the payday lending issue.

The bill limits borrowers to one loan at a time and creates a statewide database to track loans.

Sanford worried the database would violate borrowers’ privacy.

“So, we’ll get the numbers back (from the database) and come back next year,” Malloy said.

The database is supposed to help ensure that consumers can take out only one loan at a time, thereby ending the practice of “flipping.” Consumers get trapped in cycles of debt with payday loans by taking out multiple loans they cannot afford to repay, consumer advocates say.

Richland County Sen. John Courson, a Republican, viewed Tuesday’s vote as a first step toward banning payday lending.

“I do believe, in the future, we are going to be looking at banning this industry in the state,” he said.

Jamie Fulmer, spokesman for Advance America, the Spartanburg-based largest payday lender in the country, said his company now looked forward to continuing to provide their services and products to consumers in South Carolina.

“All along, we said we wanted to work toward reasonable reforms with protections to consumers,” Fulmer said.

Though Fulmer said the bill is not what his industry would have crafted — that some protections went too far — he said the company is moving on.

The one loose end facing lawmakers — a bill creating a panel to study state taxes — was wrapped up quickly Tuesday morning and approved by the House and Senate.

The bill creates an 11-member panel to study state taxes and recommend changes — with an eye toward making taxes fairer and more efficient and reliable — by next March.

Lawmakers would appoint eight members and Sanford two, with the final slot filled by the Department of Revenue. It would be a misdemeanor for lobbyists to contact any member of the committee.

The bill also would study a state version of the FairTax, which would raise the state sales tax but eliminate income taxes.

But the compromise axed two key provisions, one studying a 2006 statewide property tax reform law for homeowners and another allowing House Democrats to appoint a member.

Many have complained the property tax reform law has shifted the tax burden to businesses and made some companies less willing to invest in the state. In addition, the law means there will be about $100 million less in the state budget for the fiscal year beginning July 1 because sales tax revenues have failed to fully fund the homeowner property tax credits.

House Minority Leader Harry Ott, D-Clarendon, voted for the panel, but said the property tax plan needs to be overhauled.

“How do you fix a $100 million problem but you can’t study the part that creates the $100 million problem?” Ott asked.

The bill is a top priority of legislative and business leaders, who said they could live with the compromises.