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Greenville Business Magazine

The Business Narrative: Lower UI Business Tax

Nov 08, 2022 01:14PM ● By David Dykes

Governor, S.C. Department of Employment and Workforce Announce 2023 Tax Rate Cuts for South Carolina Businesses

Gov. Henry McMaster and S.C. Department of Employment and Workforce (DEW) Executive Director Dan Ellzey announced that South Carolina’s unemployment insurance (UI) tax rates will decrease or remain the same for all employers in 2023.

This is the 10th year in a row that the agency, the General Assembly, and the governor’s office have been able to maintain or lower UI business tax.

“Today’s announcement will save South Carolina’s businesses millions of dollars, allowing them to create new jobs for people and invest more in their companies and communities,” McMaster said.

With a balance of approximately $1.4 billion, South Carolina will:

* Set tax year 2023 rates to raise approximately the same level of revenue as 2022 and 2021. Rates will either be the same or lower than in the prior three years. No tax rate class will experience an increased tax rate for 2023.

*Rates will be lower for rate classes 2-19 by an average of 15.5 percent compared to 2022 levels.

*Not require any solvency surcharge due to the sufficiently high trust fund balance.

*Maintain a balance that ensures the state can withstand a moderate economic contraction.

Each year, state officials estimate the unemployment benefits that will be paid in the following year and set the tax rate to ensure that the trust fund has the revenue to make the payments.

The process to determine the tax rates involves an extensive analysis of the economy, the current level of the UI Trust Fund, expected unemployment, estimated benefits that will have to be paid, and revenues that will need to be generated to pay such benefits.

During the Great Recession, South Carolina borrowed nearly $1 billion from the federal government in order to continue to provide unemployment benefits. The agency was able to pay off the loan early, saving businesses roughly $12 million in interest.

After the loan was paid off in 2015, the Legislature passed new regulations requiring DEW to rebuild the trust fund within five years to a level that would cover potential benefit needs of a typical recession cycle without borrowing from the federal government. The agency completed the rebuild effort in 2019.

Although most pandemic unemployment benefits were paid through federal programs such as Federal Pandemic Unemployment Compensation (FPUC), the trust fund balances of states were also depleted as UI payments were dispersed.

Twenty-three states borrowed money from the federal government to help support UI benefits when claims rose exponentially across the nation, but South Carolina was not one of them.

In South Carolina, $836.4 million of Coronavirus Aid, Relief, and Economic Security (CARES) Act money was applied to the balance of the state’s Trust Fund. That allowed the state’s businesses to recover faster from the pandemic and shift efforts from unemployment to reemployment, state officials said.

Although tax rates for most tax classes are lower than their 2022 levels, individual businesses may still move between classes based on their unemployment claim activity.

All businesses with charges against their accounts are provided a “charge statement” quarterly to review and have 30 days to protest any charges that they do not believe should be on their account.

Tax rate notices will be mailed to businesses on Thursday, Nov. 10, but employers can log into their State Unemployment Insurance Tax System (SUITS) account beginning Monday, Nov. 7, to see their 2023 tax rate.

Click here to view the 2023 tax rate chart. 

Forestry Has $23.2 Billion Impact on SC’s Economy

South Carolina Forestry Commission officials announced the economic impact of the state’s forestry sector recently, citing a recently commissioned Economic Impact Analysis for Planning (IMPLAN) study.

In detailing the $23.2 billion impact that the allied sectors of forestry and forest products-related industries generate on the Palmetto State’s economy, the Forestry Commission study also revealed that forestry generates more than 100,000 jobs and $5.5 billion in labor income.

The results of the economic impact analysis of 2020 data were presented by study lead Dr. Joey Von Nessen, a research economist with the University of South Carolina Darla Moore School of Business, at the Forestry Association of South Carolina’s 2022 annual meeting.

The total economic output of forestry grew 9.6 percent since the last report published in 2019. The other factors analyzed – employment, labor income and value-added metrics – increased by 1.9 percent, 12.5 percent, and 8 percent, respectively.

According to Von Nessen, the growth in the industry was largely a factor of an increase in demand for forest products, such as construction materials and sanitary paper products, and the resulting rise in commodity prices.

The full economic impact study is available on the SCFC website at the link:

Buvermo Acquires Myrtle Beach 55+ Apartment Community

Buvermo Investments, a commercial real estate investment company, announced the acquisition of Inspire Coastal Grand, an active adult apartment home community in Myrtle Beach, S.C.

The property, which now operates under the name The Grove at Coastal Grand, is located at 1749 Sea Pine Blvd.

Company officials said the acquisition highlights Buvermo's growing investment in the active adult sector and will bring capital improvements to the current property, as well as the introduction of Greystar, a leader in rental housing, as the new property management team onsite.

Greystar currently operates 90 active adult apartment homes and roughly 15,000 units nationwide.

"We are seeing an influx of older adults migrating to coastal towns that are seeking connection and community," said Kevin Woodley, managing partner at Buvermo.

"Our goal in acquiring this resort-influenced community is to further develop community partnerships and both enhance the development offerings and innovate the operations for current and future residents.” 

The four-story, 194-unit development offers residents one-, two- and three-bedroom floorplans with private balconies and patios.

Spanning over nine acres, the community features include a resort-style pool, fitness center, yoga studio, creative arts room, theater room, billiards room, dog park, outdoor courtyards, walking trail, and pickleball and bocce ball courts. 

Buvermo partnered with First National Bank on the acquisition.

Sea Turtle Season Wraps With High Nest Numbers

South Carolina’s official sea turtle nesting season concluded Oct. 31, 2022, with welcome news.

Data collected by agency staff and its volunteer network showed an estimated 8,004 nests laid along state beaches this year, the second-highest number on record.

“We're excited to see another successful nesting year for sea turtles along the South Carolina coast," said Michelle Pate, nesting program leader for the S.C. Department of Natural Resources (SCDNR).

"Increased nest counts since the mid- to late 2000s show promise for the loggerhead; we're seeing the continued benefits of conservation measures enacted decades ago as well as those management techniques still used today."

Most nests in South Carolina belong to loggerhead sea turtles, which accounted for over 99 percent of nests in 2022.

But loggerheads weren’t the only species to visit the coast this year. Green sea turtles laid an estimated 21 nests on beaches ranging from Myrtle Beach to Edisto Island, a record number for South Carolina.

The threatened green sea turtle is an infrequent nester on state beaches, but young greens are more common in South Carolina salt marshes and tidal creeks, where they find shelter and food.

In late September, beaches north of Charleston took a powerful beating from Hurricane Ian – including the state’s densest nesting islands in Cape Romain National Wildlife Refuge. The Category 1 storm made landfall south of Georgetown.

"Fortunately, most of the nests had already hatched by the time the storm reached us," said Pate. "But continued and heavy overwash by King Tides [seasonally high tides] earlier in the season rendered a lot of eggs non-viable." 

Collectively, King Tides and Hurricane Ian reduced the nesting habitat available to nesting females by eroding beaches, including recently renourished beaches.

A success story of the season unfolded in the Town of Edisto Beach, where work to reduce the dangers of artificial lighting continued to pay off. Sea turtles rely on the light of the night horizon to navigate, making both nesting mothers and emerging hatchlings very sensitive to artificial lights.

Repeated instances of sea turtle disorientation due to nearby street and beachfront lighting led the Town of Edisto Beach to secure a federal grant in 2020 to install new, turtle-friendly streetlights.

With the help of Dominion energy, the lights were installed in 2021, and instances of hatchling disorientation dropped this year.

Officials said beachfront lighting continues to be a persistent problem elsewhere, particularly on the heavily visited, heavily lit beaches of Hilton Head Island and the Grand Strand.

South Carolina’s federal recovery goal for loggerheads is 9,200 nests.

Nest numbers are just one of many considerations and milestones that are part of the national Recovery Plan for the loggerhead sea turtle, but they’re part of a growing body of research suggesting the species is on a positive path.

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