COLUMBIA, S.C. (WBTW) – State Treasurer Curtis Loftis says South Carolina taxpayers need to know that their taxes will likely have to go up soon to pay for the debt in the state pension system. The system’s debt is about $21 billion, he says.
“It’s bad news for taxpayers because there’s this huge cloud of debt that hangs over the state and they’ve got to pay that debt, and that’s going to affect every police station, every fire station, every school, every state agency. That money’s got to come from some place, and, as we all know, the money’s got to come from the taxpayer,” he says.
He says the debt has accumulated because state lawmakers haven’t put enough money into the system, which is the retirement program for state and local employees, including teachers, police officers, and firefighters.
“Nobody hates taxes more than I do, but it just costs more money,” he says. “So we’ve got to have a good, open, frank conversation. If we push this off until next year, if we push this off until the 2018 year, actually, then it’s going to cost us two, maybe three billion dollars more. So the sooner we fix it the better.”
He wants taxpayers to be aware of the problem because he says it’ll take tax increases at both the state and local levels to fix it. State and local employees who pay into the system already pay more than the national average and they’ll be paying more when scheduled hikes take effect in 2018, 2019, 2020, and 2021, he says.
“The taxpayers ought to be told about this,” Loftis says. “The taxpayer can see a pothole, but they can’t see the pension debt, so we’ve got to talk to them. It’s not fair to the taxpayer. We’ve got to get out there and talk to them about, ‘This is going to cost you money and you need to be studying on this issue.’”
State lawmakers have formed a joint House and Senate committee to study the problem, but Loftis says lawmakers are the ones who underfunded the pension system to begin with. They’ll also be debating how to pay for roads. But Loftis says, “They want to put off into the 2018 year some type of fix for the pensions and do gas tax first. We can’t. We’ve got to change that order.”