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House Approves ESC Reform

 
COLUMBIA, S.C. – The South Carolina House of Representatives approved sweeping changes to the state’s Employment Security Commission just three weeks after an audit that revealed widespread mismanagement.

The reforms approved Wednesday include creating a new Department of the Workforce in the governor’s cabinet, and moving several workforce and unemployment responsibilities from the ESC and the Department of Commerce to the new agency. The legislation also abolishes the board of the ESC and puts an executive director in charge.

“The problems in the ESC were astounding and the only solution was a complete overhaul of the agency,” said Majority Leader Kenny Bingham, who has been working on ESC reform for two sessions. “Over the last 8 years, we have seen dramatic changes in the Department of Motor Vehicles and the Department of Transportation after they were moved under the control of the governor. I hope we see the same improvements in the ESC.”

The audit, released at the end of January, showed the ESC did not warn the General Assembly that the unemployment system was running out of money and that the agency did not properly investigate mismanagement – among many other findings. From 2000 until today, the Unemployment Trust Fund plummeted from an $835 million surplus to an $800 million deficit.

“Nobody thought the situation at the ESC was as bad as it really was,” said Rep. Annette Young. “Today’s reforms will bring accountability to an agency that desperately needed it.”

This is the second ESC reform bill to be approved by the House this year. The first was a series of procedural reforms that included restricting state payments to employees fired for gross misconduct or drug use and restricting claims by employers who cost the system more than they contribute.

“This is another example of the Republican Caucus moving quickly to reform government once a problem is discovered,” said Rep. Bruce Bannister of Greenville. “We accomplished these reforms in the fifth week of session so there is plenty of time for these critical reforms to become law.”