DEW financing plan: property sales to pay for new tax system; benefits system rollout scheduled this summer

Director Cheryl Stanton told the oversight committee the agency has sold surplus properties and is using the proceeds to finance both a new UI tax system and other modernization efforts so the department does not need an additional general‑fund appropriation.

Stanton said the surplus‑property program, run with the Department of Administration and a commercial partner, produced roughly $9 million in sales proceeds to the agency that are being reinvested in IT modernization. She told members this was federal money originally used to buy buildings in the 1980s and that the Department of Labor has since encouraged states to divest excess real estate.

On IT projects, Stanton described two parallel modernization efforts. A new benefit system—developed in cooperation with North Carolina and Georgia—was scheduled to go live in South Carolina first, with the other states following. She described both the benefit and tax contracts as fixed‑price and back‑ended: “We pay for working product” rather than for time and materials, she said, and noted the agency has paid a minority share to date because much of the deliverable remains to be accepted.

Stanton told the committee the contract structure reduces the risk of open‑ended vendor billing and that working with other states provides both cost savings and shared subject‑matter expertise. Members asked about the vendor funding and whether additional appropriations were required; Stanton said the vendor contract is fixed and the agency did not request additional funding for the current contract scope.