THE INSIDERSouth Carolina Policy Council / Fall 2016

Also . . .Landess: Effort vs. Results page 2SCPC Expands Its Team page 3Oligarchy in South Carolina? page 4Best & Worst Released pages 6-7

How Secure Is Private Property in South Carolina? page 5

“Don’t confuse effort with results.”

That line is popular in the corporate world – you see it on posters and coffee mugs. And rightly so. It’s so easy to think that if we put in long hours, if we go to a lot of trouble to ensure that things are done well, we’ve accomplished the goal we set out to accomplish. But of course that’s not necessarily true.

Here at the Policy Council, I’ve slightly modified the aphorism to “Don’t confuse effort with impact.” Impact is always what we want. The word signifies a measurable outcome as a result of our work. So for example if we publish an engaging, powerfully written report on property rights, that’s not impact – by itself it made nothing happen. But citizens pack a hearing room and, armed with what they learned from our report, confront public officials about unconstitutional government encroachments on private property – that’s impact.

The line has become something of a mantra around our office – in fact some on our staff are probably tired of me saying it!

Yet it’s so easy to look at all the effort we’ve gone to, and conclude we must have achieved impact. Last spring, we could easily have looked at all the work we had done on the state’s road funding system – Nerve articles on politicians profiting from DOT contracts, policy briefs explaining how a few legislative leaders control the whole system – and concluded that we had done all we could do.

But those things weren’t enough to stop lawmakers from raising the gas tax and flooding a corrupt system with new money. We had to get our analyses into the hands of people who understood and cared about

the issue, and they made the difference. They explained to their elected officials that raising taxes to prop up a broken and unaccountable system wasn’t an option – and the message got through. The tax hike that almost passed in 2015 fell dead in 2016.

That’s impact. And it’s something we’re trying to duplicate across the board. If we expect to see South Carolina’s government and political culture adopt SCPC’s core principles of limited government, free enterprise, and individual liberty and responsibility, we’re going to have to make that kind of impact happen again and again. Or to put the same point another way: If you and I are going make South Carolina the freest state in the nation – if we’re going to make this state a place where government has the least authority over the private sector, where taxes are the lowest, and where politicians are the most accountable – we’re going to have to get better and better at putting our products into the hands of the citizen activists who can make the difference.

With that definition of impact in mind, we’ve made a few additions to our team. We’re taking on social media interaction in a new way, we’re building a research department that can turn around legislative analyses at lightning fast speed, and we’ll shortly have new members on our Nerve team. You’ll read about all of this in the pages ahead.

It’s a great time to be part of the freedom movement in South Carolina – State House politicians don’t know what’s about to hit them.

All the best,

E. Ashley Landess

from the president

INSIDER 2 scpolicycouncil.org

Staff

E. Ashley LandessPresident

Eric TilleyExecutive Vice President

Phillip CeaseDirector of Research

Dave SchwartzDirector of Development

Barton SwaimDirector of Communications

Winky ZeberleinDirector of Operations

Lindsay Elliott Project Manager

Hannah Hill Policy Analyst

Duncan TaylorPolicy Analyst

Elisabeth Parker Research Assistant

Seth PowellOutreach Manager

Lauren MullisDevelopment Coordinator

Melissa LevesqueDevelopment Executive

THE INSIDER is published quarterly by the South Carolina Policy Council Education Foundation. Nothing in this publication should be construed as an attempt to aid or hinder passage of any legislation. © 2016 South Carolina Policy Council Education Foundation.

The South Carolina Policy Council was founded in 1986 as an independent, private, non-partisan research organization to promote the principles of limited government, free enterprise, and individual liberty and responsibility in the state of South Carolina.

1323 Pendleton StreetColumbia, South Carolina 29201SCPC 803 779 5022NERVE 803 254 4411Fax 803 779 4953www.scpolicycouncil.orgwww.thenerve.org

Effort vs. Results

INSIDER 3 scpolicycouncil.org

Quotable

“The budget is simply not what it’s portrayed as. Legislators ignore the state law that mandates an open budget process, period.” –Ashley Landess, quoted in Governing magazine, August 2016

“In effect, the bill places authority to investigate ethics violations with a notoriously understaffed agency, then establishes legislative control over that agency, all while leaving the authority to punish or not punish lawmakers firmly in the hands of lawmakers..” –SCPC’s Hannah Hill, “Ethics Law Still Lacks Genuine Accountability,” Charleston Post and Courier, June 26, 2016

“When students are walking past an adviser’s office, it’s easy to say ‘Hi,’ ask a question, engage in conversations that might be very useful.” –Steve Lynn, dean of the USC Honors College, explaining why the university needed an additional $15 million to build another wing of the Honors College, quoted in The State, September 1, 2016

“Why are you here?” –Unnamed members of the Department of Commerce, spoken to The Nerve’s Duncan Taylor when he showed up for a “public” meeting of the Coordinating Council

Our Team ExpandsEric Tilley, executive vice president

Originally from North Charleston, Eric graduated from the United States Military Academy (West Point) and attained the rank of Colonel in the US Army. During his service, he held key leadership positions throughout the US, Europe, and Asia. He is an accomplished executive leader and manager with over two decades of extensive team-building, problem-solving, and management experience. Eric has been directly engaged with public policy issues at the local, state, national, and international levels. A graduate of the US Army War College, he has Masters Degrees in Public Administration and Strategic Studies.

Phillip Cease, director of researchBefore joining the Policy Council, Phillip Cease was policy advisor to Governor Mark Sanford, assistant to State Treasurer Curtis Loftis and executive director for the SC Club for Growth. Most recently, he was president of South Carolinians for Responsible Government where he was integral in developing South Carolina’s first private school choice program. Phillip is married with two daughters.

Duncan Taylor, policy analystDuncan Taylor completed his undergraduate degree in political science at the University of Texas and his Master’s degree in American politics at the University of New Hampshire. Prior to joining SCPC, Duncan was the New Hampshire State Director for Protect Internet Freedom. He has also worked with Americans for Prosperity Foundation-New Hampshire as a policy analyst, where he wrote and published white papers on tax policy and labor issues. Duncan is an avid musician and athlete and is a member of the Columbia Rowing Club.

Seth Powell, outreach managerSeth has worked on local and state political issues for several years. Before joining the Policy Council in August, he was the president of the Greenville County Taxpayers Association and a field director for Americans for Prosperity. Seth is a native South Carolinian and lives in Greenville with his daughter.

INSIDER 4 scpolicycouncil.org

Find The Nerve on social media! @thenervesc /thenervesc thenerve.org

thenerve.org

The term “legislative state” gets thrown around a lot these days. It’s supposed to make the state’s gross imbalance of power seem like a reasonable alternative – a “legislative state,” as opposed to an “executive state,” sounds like a legitimate thing. Of course, it’s not.

Another problem with the term is that it implies the entire legislature runs the state. In fact, a small group of legislative leaders runs it. Consider the recent controversy over the expansion of Coastal Carolina’s stadium.

First, some context. Coastal Carolina University decided to move from the Big South to the Sun Belt Conference. In order to make this switch, university officials needed to increase the size of the school’s stadium and wanted to issue bonds to cover the construction cost.

The Commission on Higher Education (CHE) first had to approve the bond request, but the agency denied it – four times – citing insufficient funding to cover the bond debt. Normally that would be the end of the story. But thanks to that small group of powerful legislators in Columbia, Coastal Carolina will get its stadium expansion.

At the very end of the budget process, Rep. Brian White (R-Anderson) introduced two budget provisos that allowed Coastal Carolina to circumvent the CHE’s decision. In the Conference Committee for the budget, Senate Finance chairman Hugh Leatherman (R-Florence) agreed to the House provisos.

Gov. Nikki Haley vetoed the provisos, noting in her veto message that Coastal Carolina “deployed an aggressive lobbying effort to bypass CHE’s statutory responsibility to review and consider higher education capital projects, resulting in this proviso.” She went on: “The project, primarily funded by tuition-backed debt, nearly doubled in cost since its original proposal last fall.”

The governor’s vetoes were overwhelmingly overridden in the House. In the Senate, one proviso was sustained (meaning the Senate agreed with the governor’s veto). But ten minutes later, Senate leaders, evidently unhappy

with the result, moved to reconsider – a parliamentary maneuver allowing the chamber to take up a veto again even though members already sustained it. The provisos were overridden, with White and Leatherman on the prevailing side.

The next step for Coastal Carolina was to go before the Joint Bond Review Committee (JBRC), a body made up entirely of legislators. The chairman and vice chairman of the JBRC are none other than Leatherman and White, respectively. The committee approved the bond proposal.

After it was approved by the JBRC, the State Fiscal Accountability Authority (SFAA) voted 3 to 2 to allow the project to move forward. Leatherman and White are on that five-member board, too; they accounted for two of the three “aye” votes.

In the end, White and Leatherman voted on the proposal no fewer than seven times. Four for White and three for Leatherman. The governor, meanwhile – who, unlike White and Leatherman, is elected by the entire state – only got to act on the measure twice: first with a veto, second with a vote on the SFAA. In both cases, she was outgunned by two lawmakers.

Maybe the best term isn’t “legislative state” after all. Maybe we should refer to South Carolina as an “oligarchic state.” Consider Leatherman. The Florence lawmaker has at least 46 boards and commission seats he either serves on or can appoint to. On some boards he appoints more than one member (for example the Judicial Merit Selection Commission).

A few years ago when the legislature passed and the governor signed a government restructuring bill that supposedly “abolished” the Budget and Control Board, lawmakers and other politicos cheered the “historic” victory for accountability. Judging by the CCU stadium controversy, however, the end results of the new restructuring law were (a) that the Budget and Control Board has a new name – it’s the SFAA now – and (b) that the oligarchy remains firmly in place.

How Two Lawmakers Overruled Everybody to Get a Stadium Approved By PHILLIP CEASE

On ourWebsites

The Gun Death ‘Epidemic’ & the 2nd Amendment

Are gun control measures motivated by reason or fear? A calm look at the numbers strongly suggests the latter. Go to: bit.ly/constitution-guns

Another Agency to be ‘Reformed’ by Lawmakers

When things go bad at a government agency, legislators usually propose giving it to the governor. With strings attached, of course. Go to: bit.ly/2cfHsZp

How One Agency Keeps Its Spending Secret The agency spends state money. Its workers are state employees. Why, then, won’t it reveal anything about its spending? Go to: bit.ly/2dJM3k

&

INSIDER 5 scpolicycouncil.org

impact

Over the last several years, we’ve noticed some pretty disturbing trends in legislation filed at the State House. These bills aim to regulate – or just infringe on – your constitutional rights. We’ve identified three areas – the First, Second, and Fourth Amendments – where state lawmakers seem to think they can chip away at rights with little or no justification. On freedom of speech, freedom of assembly, and the right to private property, our General Assembly needs careful supervision.

So in September, we began a series of brief, hard-hitting research pieces on threats to constitutional rights. First up: the Second Amendment. With lawmakers holding public forums around the state on gun rights, we posted an analysis of legislative trends and a fact sheet. Armed with those materials, our members and allies packed lawmakers’ public forums and reminded lawmakers that constitutional rights aren’t to be tinkered with just because politicians think it’s a good idea.

There’s more to come on the freedom of speech and property rights. Check out our website for the latest: scpolicycouncil.org.

How Secure Are Your Rights?NOT AS SECURE AS YOU MIGHT THINK

right: SCPC president, Ashley Landess, discusses the ethics bill with

a reporter from The State

left: SCPC president, Ashley Landess, debates an econoic development bill on WIS News

INSIDER 6 scpolicycouncil.org

Seventh Annual Best and Worst of the General Assembly Released

Best�WORSTThe South Carolina General Assembly

2016

In early October we released our annual Best and Worst guide to the year’s legislative session. You may have received yours in the mail already. As in years past, there were far more in the “worst” category than in the “best,” but the year had its modest successes even so.

This year, though, we’re promoting the online version of Best and Worst much more aggressively. Why? Because over the last year or two, we’ve heard from numerous grassroots organizations that use Best and Worst as a tool for assessing the legislature. The electronic version, remember, links to bills and vote tallies. Citizens can find out not just what the bill would

or wouldn’t do, but who sponsored it and who voted for and against it. So while our role isn’t to tell citizens which lawmakers they should praise or blame, we do want to give them a tool that allows them to assess their elected officials accurately.

So if you haven’t seen the online Best and Worst yet, type http://bit.ly/BW-2016 into your web browser. You can search the text by bill number or subject keyword. And don’t forget to click the links.

Here are a few of the items that struck us as the year’s best . . . and worst.

WORST H.3186 – INCOME DISCLOSURE FOR PUBLIC OFFICIALS

STATUS: Passed House, Passed Senate, Act No. 283

While this bill will require lawmakers to disclose their private income sources (with a few exceptions), it fails to address the original sources of income. For instance, lawmakers could easily funnel their more questionable incomes through a limited liability company (LLC), and only list the LLC as the income source. Similarly, lawmakers are not required to disclose any government contracts or subcontracts their business is involved in. Any reform to the state’s disclosure requirements should aim to expose conflicts of interest, and that is what this bill doesn’t do. Gov. Haley signed the bill on June 23, 2016.

BEST H.4537 – CODIFYING TAX CREDIT SCHOLARSHIP PROGRAM FOR EXCEPTIONAL NEEDS STUDENTS

STATUS: Passed House, Referred to Senate Finance

This bill would codify the exceptional needs scholarship tax credit program, taking it from a proviso that must be renewed annually to a permanent program. Individuals and corporations would receive dollar for dollar income tax credits by donating to exceptional needs children’s tuition for eligible schools. The bill would benefit all the students participating in the program, and indeed lawmakers should consider extending tax credit scholarships – or other forms of school choice – to all South Carolina K-12 students. Making school choice widely available could improve academic achievement for all South Carolina students and cost the state less money.

INSIDER 7 scpolicycouncil.org

BEST S.868 – DENYING NON-UTILITY PIPELINES THE POWER OF EMINENT DOMAIN

STATUS: Passed Senate, Passed House, Act No. 205

When it was originally filed, this bill would have granted the power of eminent domain (government’s ability to expropriate private property for public use) to a private company constructing any kind of pipeline. After SCPC published an analysis of the bill on our website and citizens began showing up to public hearings on the bill, lawmakers regrouped and substantially amended it. By the time it reached the governor’s desk, it explicitly clarified that eminent domain would not apply to private, for-profit pipeline companies not defined as a public utility. Both the constitution and the law code sound tough but are actually vague on eminent domain; indeed the constitution seems to allow the General Assembly to decide questions of land seizures. The issue is bound to be looked at again given that the provision denying these powers will sunset in June of 2019. Gov. Haley signed S.868 June 3, 2016.

WORST H.5011- REINSTATEMENT OF LOCAL OPTION TOURISM DEVELOPMENT FEE

STATUS: Passed House, Passed Senate, Veto overridden by House, Veto overridden by Senate, Act No. 249

The bill allows municipalities to extend the Local Option Tourism Development fee. This fee is one percent of all sales subject to sales tax, and is mostly to be used for tourism advertisement and promotion. However, 20 percent of the fee proceeds may be used for a property tax credit. Current law states that the fee can only be imposed for ten years at the most. The fee could be

renewed in the same way it was imposed, either by ordinance or local option. The problems with this and similar bills are basically three. First, tax increases for specific projects – in this case, tourism marketing – nearly always lead to waste and fraud. Second, it’s intrinsically unfair for government officials to use public money to prop up one industry. And third, there is no way to assess the success of such a venture: Who really knows if a certain advertisement for South Carolina beaches, say, had any positive effect at all? And in any case why would anybody suppose government officials know the best ways to spend advertising money?

WORST H.4717 – MORE WELFARE FOR THE AGRICULTURE INDUSTRY

STATUS: Passed Senate, Passed House, Veto overridden by House, Veto overridden by Senate, Act No. 174

H.4717 establishes the South Carolina Farm Aid Fund in response to the October 2015 flooding. The fund is administered by the Department of Agriculture, with the advice of a Farm Aid Advisory Board. To qualify for assistance from this fund, the farm must have lost 40 percent of agricultural commodities due to the October 2015 flooding (among other criteria). Each grant can equal up to 20 percent of the farmer’s verifiable loss, but no one (including the farmer’s relatives) may receive grants aggregating more than $100,000. The bill appropriates $40 million from the 2014-2015 Contingency Reserve Fund to the South Carolina Farm Aid Fund.

Crop insurance is already available to farmers from the federal government, and those programs have a history of waste and fraud. The federal government also provides crop disaster relief outside of its crop insurance programs. Indeed, agriculture is one of the most heavily subsidized industries in the American economy, and the average farmer is financially far better off than the average worker or professional in many other industries. Political rhetoric aside, there is no special need for the government to subsidize the agricultural industry. Farmers should be responsible for their own profits and losses, and subject to the risks inherent in their industry just like every other business. Notwithstanding, lawmakers easily overrode the governor’s veto.

This publication is possible through the support of people like you.

Please consider becoming one of our monthly partners to make South Carolina the freest state in America!

Donate today at www.scpolicycouncil.org/membership

Thank you!

S.C. Policy CouncilEducation Foundation1323 Pendleton Street Columbia, SC 29201

NON-PROFITORG.

U.S. POSTAGE

PAIDCOLUMBIA, SC

PERMIT #53

A key part of the Policy Council’s mission is to keep citizens informed about what happens – hearings, committee meetings, floor debates – at the South Carolina State House. That’s often a challenge for very practical reasons: Meeting times change, hearings happen on short notice, and politicians would often prefer that nobody attend their “public” meetings.

As a result, too many decisions are made in de facto secret, and too many taxpayers find out about important meetings after

they’ve already happened. So when the 2017 legislative session begins, we’ll be making

a more deliberate effort to keep our members and other activists in the loop. Soon we’ll have a new feature on our website to let users know what’s going on – and when – in and around the State House.

And if you’re not already on our email list, sign up from

our home page at scpolicycouncil.org. And we’ll keep you up to date on our social media pages, too, especially Facebook and Twitter.