State of the State Address As Prepared for Delivery, Sending $200 Million Back to Taxpayers
Friday, January 25th, 2019
Ladies and gentlemen, I thank you all for being here tonight, those in this magnificent building as well as those watching from afar.
I am proud of our state and I am also proud of my family. For those who have not met them, please let me introduce my wife, Peggy and my son Henry and his wife Virginia. We all live in Columbia. My daughter, Mary Rogers, is watching from New York with her fiancé, Samuel Martin Herskovitz. The big date: March 16. Will you please stand be recognized? Thank you.
One year ago, I observed that we were at the dawn of a new prosperity, that our future would be even better than our past.
Tonight, as we all know, it is true. The state of our state is strong – and getting even stronger. We live in a land of opportunity. And over the generations we have built the institutions of opportunity. Our goals today must be to re-invigorate and accelerate those institutions and rededicate ourselves to achieving the prosperity which can be ours.
We have a strong state because we are strong people. A family, a state, a nation is only as strong as its people. Our strength is an economic issue and also an issue of national security. In a rapidly changing world – a highly competitive and dangerous world – we must be constantly making our people strong. Educated. Trained. Healthy. Happy.
As I speak tonight, I would like to recognize just a few of our strong people. Leaders who have made a difference in our lives. I start with the six in uniform who lost their lives while protecting ours.
Deputy Shannon Dale Hallman of the Saluda County Sheriff’s Office;
Deputy James L. Kirk, Jr. of the Lancaster County Sheriff’s Office;
Sergeant Terrance F. Carraway of the Florence Police Department;
Deputy Farrah B. Turner of the Florence County Sheriff’s Office;
Assistant Fire Chief Dennis Charles Straight of the Charlotte Road/Van Wyck Volunteer Fire Department in Lancaster County; and
Sergeant First Class Christopher A. Celiz, United States Army, who lost his life in Paktia Province, Afghanistan in support of Operation Freedom’s Sentinel.
To the families and loved ones of these men and women, on behalf of all South Carolinians, we send you love, admiration and strength, and we thank you for your loved ones’ service and sacrifice. You are in our prayers.
I would also like to thank Dr. Harris Pastides, who is retiring after ten years of remarkable leadership and accomplishment at the University of South Carolina, who is with us tonight. Dr. Pastides, please stand and be recognized.
Not with us tonight is Dr. Andrew Hsu, whom we welcome as the new president of the College of Charleston. He has called this position his “American Dream.”
And also, I’d like to congratulate Clemson University on winning their third national championship.
In many different ways, all of these men and women have added to the strength and prosperity of our state.
And I have one brand new face for you: Lieutenant Governor Pamela Evette of Travelers Rest with her husband David and son Jackson. Thank you for accepting the call to serve our fellow citizens. Please stand and be recognized.
Ladies and gentlemen, South Carolina is red hot.
Our agricultural base is accelerating, our tourism industry is thriving, and we have become a major high-tech manufacturing hub. South Carolina is the nation’s top exporter of tires and of completed automobiles. Our average annual manufacturing employment growth is 16%, the highest in the southeast. Over and over we are recognized as one of the best places in the country to do business and to visit or vacation.
In the last two years, we have announced over $8 billion dollars in new capital investment and more than 27,000 new jobs. Our unemployment rate just hit an all-time low. More people are working than ever before.
In the past year we have welcomed many new businesses to South Carolina and celebrated the growth, expansions and milestones with those who already call our state home. Some of them are here with us tonight. I’ll ask them to stand and we’ll welcome as a group.
Representing W International, Mr. Ed Walker and Ms. Michelle Fowler
Representing Kent International and Bicycle Corporation of America, Mr. Arnold Kamler and Mr. Scott Kamler
Representing DRÄXLMAIER Group, Mr. Bradley Nelson and Mr. Chip Vogel
Representing Keurig Dr. Pepper, Mr. Randy Downing and Ms. Pam Daskalakis
Representing Sonoco, Mr. Rob Tiede and Mr. Roger Schrum
Representing Google, Mr. Paul Carff
Representing RoundPoint Mortgage, Mr. Kevin Brungardt
Ladies and gentlemen, we welcome you to this historic State House.
Did you notice at the Inauguration ceremony two weeks ago – on the steps – in addition to the display of leadership of our academic establishment, the presence of 27 diplomats from 22 countries? These visitors are here for one reason: Commerce. Investment. Prosperity. They see that we are on the way up.
They know that we have recognized and are harnessing the catalytic power of collaborations between and among business and industry and academia. In a word, it is brainpower. Brainpower produces commercial horsepower. And that horsepower drives our economic prosperity.
Ladies and gentlemen, we in South Carolina are players in the greatest economic competition the world has ever known. We must be bold, aggressive and think long-term. We must keep the people and institutions of South Carolina leading the competition.
It has taken years to get to where we are. But we must do more.
That means we must keep taxes low, reduce burdensome regulations and invest heavily in infrastructure.
We have the highest marginal income tax rate in the southeast – the 12th highest in the nation. Seven states have no income tax at all. Taxes of all kinds at all levels add up – little by little – to smother growth.
Beating the competition requires reforming our state’s marginal income and corporate tax rates. That’s why I have proposed a $2.2 billion tax cut across all personal income brackets resulting in an average 15% rate reduction.
And that’s why I commend the House and Senate for embarking on a comprehensive effort to reform our state’s tax structure. Working together, I am certain that we will succeed and keep South Carolina winning!
This year, our vigorous economy created a budget surplus. My executive budget sends $200 million of this surplus back to South Carolina taxpayers in the form of a one-time rebate check.
Surpluses don’t mean we have to spend it all. A surplus allows us to prioritize the most critical needs in state government and then return the rest to the taxpayers!
We should commit to returning tax dollars back to our state’s businesses at every opportunity. Last year, I issued a $52 million dollar cut to the unemployment insurance taxes paid by our state’s employers. This was made possible by the leadership and work done by many in this room tonight to reform and rebuild our state’s trust fund.
The time has come to re-double our commitment to our state’s men and women in uniform - veterans, first responders, law officers, firefighters and peace officers – through a full retirement income exemption.
The exemption for veterans is a key factor in the Pentagon’s decisions on protecting and expanding a state’s military bases and expanding and bringing new missions and troops to our bases. It’s also an effective incentive to keep experienced law officers, firefighters, and first responders on the job.
We are now another year into our ongoing state retirement pension crisis. Our unfunded pension liability threatens to place unprecedented strain on state government if we do not take action soon. Retired, current and future public employees must have a pathway to retirement income security, with future benefits and costs that are both sustainable and predictable. Doing nothing threatens our commitment.
It is a fact that we have some of the strongest people in the country in the field of education.
For example, in 2001, Dr. Sharon Buddin of Ridge View High School, and in 2009, the late Lucy Beckham of Wando High school were named National Principal of the Year. Last year, it was Dr. Akil Ross, of Chapin High School. This year, we celebrate again, with Dr. Lucas C. Clamp, of River Bluff High School, being recognized as National Principal of the year.
They aren’t able to be with us here tonight, but we thank them for exemplifying the greatness that South Carolina produces.
Ladies and gentlemen: we are building an international reputation for business growth and progress. Being perceived as weak in any part of our state in education is not good. But being perceived as not committed to fixing it is disastrous.
Not long ago, I had a conversation with Dr. Wanda Andrews, the Superintendent of the Lee County School District. A rural county. Education suffers there. Once grown, children leave, only returning for a family reunion or homecoming football game.
I asked Dr. Andrews what would happen if a new manufacturing plant offering 500 jobs were to come to her district. Dr. Andrews set down her pencil, took off her glasses and said, “it would change everything.”
Dr. Andrews, that is exactly what we are going to do: change everything. The words “Corridor of Shame” will be a distant memory! Dr. Andrews, please stand and be recognized.
This will require a state-backed economic development commitment to bring jobs to these districts by providing infrastructure in rural areas – not only in water, sewer, and roads, but in school buildings and facilities. We must provide the spark.
My executive budget creates the “Rural School District Economic Development Closing Fund.” This fund will provide $100 million dollars for our Department of Commerce to use as a “closing fund” to bring new jobs and investment to our poorest school districts.
We must also invest in our teachers. To attract and retain the best, their compensation must be competitive with their peers in the southeast and elsewhere. My executive budget calls for a 5% teacher pay raise totaling $155 million dollars. This will increase average teacher salaries above the southeastern average.
But we can’t stop there. The primary funding formula for public education, the Education Finance Act, was established forty years ago. That and those that have followed have become outdated, inefficient, and confusing.
They fail to provide the accountability, efficiency, and transparency necessary for a modern means of measurement, to determine if taxpayer dollars are being properly delivered and utilized in the classroom.
Last week, Speaker Lucas and President Peeler and I called on the state Revenue and Fiscal Affairs Office to objectively review South Carolina’s complex education funding formulas and suggest a new, more efficient and modern funding model for the General Assembly to consider.
Further, Speaker Lucas and Senator Greg Hembree will propose wholesale reforms to our education delivery system – eliminating burdensome testing, consolidating school districts, replacing non-productive school boards and reigning in the practice of social promotions in our classrooms. I support the Speaker and the Senator 100%. Send me these reforms and I will sign them into law.
But we can’t stop there either.
Our classrooms and schools must also be safe, free from distraction and violence.
It’s a fact: the presence of a trained certified law enforcement officer is the best and most effective deterrent against violence at a school.
Local police officers or sheriff’s deputies who serve as school resource officers are trained to spot, assess, and eliminate any potential threat. They train constantly. They immediately communicate and coordinate with local law enforcement.
Last year, we held a school safety summit of law enforcement, educators, counselors, mental health professionals, parents, and students to address the rise of violence in our schools.
Two recommendations were made over and over. One was to place a school resource officer in every school. The second was to provide access to mental health professionals who can train educators to recognize the warning signs of violent behavior in their students before it happens.
Some school districts cannot afford such personnel. Therefore, my executive budget ensures that every public school in our state has a full-time, trained law enforcement officer and access to a mental health counselor through the Department of Mental Health’s school services program.
The time to act on this is now.
For decades, every family’s goal was for their children to go to college, which meant a four-year college degree. Higher education was – and still is – the key to success.
But the industries have changed. The skills required in today’s modern workplace require us to stay ahead of demand and adapt with rapid advancements in technology. Modern manufacturing plants and assembly lines have been transformed into intricate computerized environments driven by advanced robotics, artificial intelligence, and sophisticated logistical delivery systems designed to deliver finished products around the world.
This economic prosperity can also be achieved today through two-year associate degrees and a multitude of certificates from our state’s technical colleges.
Our technical college system is the best in the country. Last year, our readySC program trained over 3,600 people for 82 companies. It is known around the world. My budget also triples existing funding for readySC, making more than $19 million dollars available for training new employees for business in the next fiscal year.
Right now South Carolina has 60,000 highly paid jobs looking for people. High tech production; advanced manufacturing. The demand for workers in the skilled trades – plumbing, masonry, carpentry, and others – high paying jobs – is so great that our businesses have to go out of state to recruit them.
High school students and their parents must be made aware that these new opportunities are readily available. My executive budget prioritizes funding for our technical colleges to identify and recruit local businesses to participate in collaborative partnerships with high schools; to create internship opportunities; to promote certificate completion. This will provide our local businesses with a pipeline of future employees who are ready to work.
My budget includes $63 million dollars in additional dollars that are dedicated to workforce training and development. It triples new lottery funding for workforce scholarships and grants – to help students attend our state’s technical colleges.
But even with our growth, the cost and debt associated with higher education is becoming a barrier for many students and their families.
With ten years of tuition and fee increases, student loan debt in South Carolina has risen by 315% - the highest increase in the country.
I am proposing a one-year freeze on tuition and fees for in-state students at our public technical colleges, four-year colleges and research universities for the 2019-2020 academic year.
In exchange for freezing in-state tuition and fees – to be certified by the Commission on Higher Education – institutions will receive a 6% increase to their annual base budget. That will be their pro-rata share from a $36 million-dollar appropriation my budget makes to the CHE.
I expect this one-year tuition freeze to serve as the first step toward a comprehensive reform of higher education funding and tuition.
Our state’s institutions of higher education play a vital role in our state’s economic prosperity. Their continued success is critical to keeping South Carolina competitive and winning.
We must also continue to invest in infrastructure. Our ports, roads, and rail are critical components of our economic prosperity.
In December, the South Carolina Ports Authority reported a 6.4% year-over-year container volume growth, with a record 2.3 million units handled in 2018 that marked the third consecutive year of record volume. We’re only getting stronger.
The deepening of Charleston Harbor is one of our most important steps to accelerate our future prosperity. Working with President Trump and his administration, and with the assistance of Senator Graham and our Congressional Delegation, last year we secured an additional $49 million dollars to keep the Charleston Harbor dredging on schedule. There is more to come. And remember, we wisely provided the first $300 million dollars several years ago to guarantee the fulfillment of the project.
Once this project is completed, Charleston will have the deepest, most efficient harbor on the Atlantic, allowing post-Panamax ships to carry even bigger loads in and out of South Carolina, spurring economic growth throughout the state.
This is an enormous competitive advantage, and to it we will add in the years ahead, a revitalized Port of Georgetown and a new Port of Jasper.
I’d like to recognize Chairman Bill Stern and CEO Jim Newsome, of the South Carolina Ports Authority for their vision and dedication. Mr. Newsome couldn’t be with us tonight, but I’d like to ask Chairman Stern to stand and be recognized.
The elemental purpose of government is to protect people and property. Today we understand the many advantages of replacing recidivism with employment. We also know that more officers on the street means less crime.
My executive budget provides more than $33 million dollars for law enforcement, corrections, probation, firefighting and other criminal justice agencies to use for pay raises, retention bonuses and hiring new officers.
It also includes an additional $40 million dollars to the Department of Corrections to expedite security system upgrades and modernization, as well as critical repairs to damaged prison facilities.
Director Bryan Stirling’s focus on workforce readiness among inmates has resulted in South Carolina having one of the lowest recidivism rates in the country. More former inmates are re-entering their communities with a job than ever before. South Carolina is a safer place because of Director Stirling’s leadership. He is one of the most innovative and effective directors of prison systems in the United States.
Director Bryan Stirling, please stand and be recognized.
The “silent hurricane” of opioid addiction continues to pummel the Palmetto State. The death toll from opioid-related overdose continued to rise in 2017, with 748 opioid-related fatalities across the state. There were just 57 in 2014.
Last year, I declared a statewide public health emergency, mobilizing the full power of the state’s emergency infrastructure in response to the growth of opioid addiction and abuse. And I signed what must be the most comprehensive set of laws in the country addressing this crisis across the spectrum of law enforcement, education, and healthcare.
For instance, our doctors are now required to educate minors and their families on the dangers of opioids before prescribing them; DHEC is issuing tamper-proof prescription pads; the anti-overdose drug Narcan is more readily available; and initial prescriptions are now limited to seven days.
I also established the Opioid Emergency Response Team, which in June released a plan consisting of recommendations on physical and public education, prevention and response, treatment and recovery, and law enforcement approaches.
Although there is still much to be done, this progress would not have happened without the leadership of our Director of the Department of Alcohol and other Drug Abuse Services.
Director Sara Goldsby, please stand and be recognized.
“A healthy mind in a healthy body” was the classical ideal; today it is a competitive advantage. Unfortunately, especially in some of our rural areas, access to good healthcare is lacking. But fortunately, we know how to fix it.
As always, education and knowledge are essential to progress. But so is the convenient access to health care professionals. This can be done in two ways: physical presence and virtual presence. We are doing both.
Last year, I signed the law repealing the restriction which required nurse practitioners to work only within 45 miles of their supervising physician. Now they can go anywhere. You are now seeing them in drug stores, rural clinics and soon – other convenient locations.
Virtual presence is accomplished by telehealth, in which we lead the nation.
We are home of the Medical University of South Carolina, which is now designated a National Telehealth Center of Excellence – one of only two in the country. This recognition would not have been achieved without the General Assembly investing and prioritizing innovation and optimization in the areas of stroke care, obstetrics, mental health and urgent care.
Through telehealth, we can expand access to healthcare professionals, improve healthcare outcomes and reduce costs.
And there is another kind of health which we must address. That is the health of the public’s confidence in their public servants and institutions.
As we move forward together, we must reaffirm our commitment to good government. As elected officials, we are stewards of the public trust. South Carolinians must trust their representatives, and representatives must demonstrate they are deserving of that trust.
Maintaining the public’s trust in government, at all levels, requires transparency and accountability on how and why every single taxpayer dollar is spent.
The best disinfectant against waste and corruption – or suspicions thereof – is sunshine. That means stronger and expanded authority for the State Ethics Commission
Anyone paid to influence decisions made by state, county, municipal, or school board officials must be required to publicly register with the state ethics commission as a lobbyist. Public officials must be required to recuse themselves when a conflict exists. And public officials in all branches of government - at all levels - must comply with the Freedom of Information Act.
I ask my colleagues to take this fresh opportunity to bring all of government into the sunlight and restore and insure the confidence of all.
South Carolina’s bright economic future and continued job growth require an abundant supply of clean and affordable energy. Without it, we are at a competitive disadvantage.
However, Santee Cooper is currently saddled with almost $9 billion dollars in debt, over $4 billion dollars of that debt from the failed VC Summer nuclear reactor construction project alone, with nothing to show for it.
This huge debt will have to be paid. Santee Cooper will have no choice but to raise rates on customers to pay this debt. Their largest customer, the electric cooperatives, will be required to pay 70% of it for the next 30 years.
I am honored to serve on the committee with members of the House and Senate to present potential solutions concerning the future of Santee Cooper. I ask that members of the General Assembly keep an open and objective mind when you receive this information. We must be deliberate and wise.
This land, as noted by explorers for kings and queens, is lush, fertile and brimming with abundance in plant and animal life. It is irreplaceable. The obligation and privilege of our generation and others to use it, cultivate it, develop it and also to protect it and encroach upon it only gently.
Our economic growth and the preservation of our natural environment are not opposing objectives which must be balanced as in a competition, one against the other. Instead, they are complimentary, each dependent on the other.
To these ends, I recently established the South Carolina Floodwater Commission. It is unique in the United States. The commission’s purpose is to provide guidance, solutions and opportunities presented by inland and coastal flooding and all that entails. Its scope will be global, to be applied here.
Such an effort requires extraordinary leadership. That is why I have asked another South Carolina leader to chair the commission. Noted attorney, former JAG officer and former commander of the South Carolina State Guard, General Tom Mullikin, please stand and be recognized.
Economic prosperity requires that we address water in a comprehensive fashion – whether it is flooding, sea rise, aquifer depletion, or upstream withdrawal. Make no mistake – a plentiful water supply is essential to our manufacturing, agricultural and tourism industries as well as our quality of life.
That means that we must stand firmly against all efforts to endanger the future of our pristine coastline, our beaches, our sea islands, our marshes, and our watersheds.
Ladies and gentlemen, that means we will not have offshore testing or drilling off the coast of South Carolina.
One final story about strong people.
For two and a half days last September, Hurricane Florence stormed across North and South Carolina – battering the coast with hurricane force winds, storm surge, and massive amounts of rainfall.
The winds were less than originally predicted; the water was many times worse. That rainfall sent almost Biblical amounts of water racing into and onto South Carolina, creating catastrophic flooding along the Lynches, Great Pee Dee, Little Pee Dee and Waccamaw Rivers, surpassing anything recorded in modern history. It stayed there for weeks.
Access to the Grand Strand was threatened by historic, rising floodwaters poised to overtake, washout and destroy the roads and bridges into Myrtle Beach, and they did. In addition, the threat of an environmental catastrophe was now on our doorstep with the certain over-topping of the closed Santee Cooper ash pond on the edge of the Waccamaw in Conway. Thus, began a remarkable feat of cooperation, engineering, science, hydrology, technology and collaboration. Four foot tall barriers were built on both sides of US 501 at Conway, saving that vital highway from certain flooding and breech. A four foot aqua-dam was erected surrounding the eight-acre ash ponds to keep potentially deadly coal ash and toxins from flowing into the Waccamaw River and the Winyah watershed, all the way to Georgetown. And potential breeches along US 378 and state highway 9 were blunted.
The participants? The men and women of the Department of Transportation and the South Carolina National Guard.
Secretary Christy Hall and Major General Bob Livingston, please stand and be recognized.
In closing, to my friends and colleagues in the General Assembly:
All of us in this building do not wear the same jerseys, but we are still on the same team. We will work together to ensure that future generations of South Carolinians are able to keep winning and prospering.
Now is the time to be bold, not bashful. Now is the time to act together. This year. Now.
May God bless you, the great state of South Carolina, and the United States of America.