By Rep. Anne Thayer
SC House District 9
All too often elected officials take a pass or the easy way out when they face difficult problems as they want to avoid political ramifications. This past week House Republicans and Democrats joined together to reform the state’s retirement system.
The overhaul of the state retirement system will save taxpayers $8 billion over the next 30 years while slicing more than $2 billion from the retirement system’s deficit. These changes ensure the system will be there for state retirees while also ensuring the state retirement system does not become a black hole for taxpayers.
The changes made to the plan include:
· Employees must pay one percent more out of their paychecks, with an additional one percent from the employers.
· Employees must pay more money to buy “service time” to retire early.
· Employees cannot use vacation days, sick days or overtime pay to calculate retirement.
· Benefits will be calculated using the last five years of salary, instead of the last three.
· New hires must work 30 years before they are eligible for retirement, up from 28 years; police officers and firefighters can still retire after 25 years.
· New hires are not eligible for the TERI program, which allows workers to retire and then return to work while collecting retirement benefits.
· Lawmakers may not retire and draw benefits while still serving in the Legislature.
The changes will affect more than a half-million members of the state retirement system. Our retirement system faces serious long-term problems, and we are proud that House members joined with many of the state’s employees and retirees in coming up with a solution that requires shared sacrifice.
Important tax restructuring bills also moved out of subcommittee this week. They include:
· Flatten the income tax. Collapsing six tax brackets (0, 3, 4, 5, 6, and 7 %) to two (3, 7).
· Slash small business “active income tax” rate. The rate would decrease from 5% to 3%.
· Cut the business property tax rate from 10.5% to 6%. The 10.5% rate is an obstacle in recruiting major manufacturers.
· Drop the property tax assessment rate on commercial and rental property from 6% to 5%.
We look forward to getting these bills to the floor when we return from our Easter furlough – a traditional break that saves the taxpayers $100,000.
As always, thank you for the opportunity of serving you.
Rep. Anne Thayer