South Carolina Statehouse Blog

Changes on the way for wayward agency

A bill sponsored by Sen. Greg Ryberg to restructure the state Employment Security Commission made its way out of the Senate today, paving the way for much-needed reforms of one of South Carolina’s most trouble-plagued agencies. These changes to bring about more accountability have been a long time in coming.

Since 2006, nearly $500 million was paid by the ESC to people who had been fired for cause, a condition that in most other states would bar an applicant from receiving unemployment benefits. In fact, South Carolina is one of only twelve states that engage in the practice. Also, since the unemployment trust fund dwindled to a zero balance in 2008, the state has had to borrow more than $700 million from the Federal government to cover the fund’s liabilities. And as South Carolina budget writers are left to make difficult spending decisions in the coming years, interest on the money borrowed will have to be paid back with state dollars.

To fix issues with the fund and the agency as a whole, benefits would be restricted for those fired for cause and cases of fraud and ineligibility would be more actively pursued. As well, if a job is offered to a claimant and not accepted, benefits could be denied or scaled back.

The bill makes significant changes in the agency, which include reorganizing it as the Department of the Workforce and placing it in the Governor’s cabinet. In late 2008, Sen. Ryberg sent a letter to the Legislative Audit Council to conduct an audit of the ESC, in anticipation of crafting reform legislation.

The LAC found fault with the actions of the ESC’s three governing commissioners, who were found to be effectively unaccountable to any one particular branch of government. The bill proposes that the Executive Director of the department be appointed by the governor after undergoing screening for qualifications by a special committee. The director would then serve at the discretion of the governor. This mechanism will provide oversight to an agency that is in desperate need of it. These restructuring mandates will go a long way toward solving the problems discovered in the audit. The move will make the agency concentrate on job placement, not check writing.

While this legislation deals mainly with resolving the administrative troubles at ESC, the financial ruin of the agency is to be dealt with in a separate bill to follow.

Considering there is significant support in the House of Representatives and from Gov. Mark Sanford for substantial reform, it’s expected that this bill - S. 391 - and its companion House bill - H. 3442 - will pass both chambers, be reconciled and signed into law before the end of the session.