Haley’s 40,000 new jobs: In the ‘pipeline’?

The Associated PressJanuary 5, 2014 

South Carolina Gov. Nikki Haley

GERRY MELENDEZ — gmelendez@thestate.com Buy Photo

Gov. Nikki Haley touts that more than 40,000 jobs have been announced during her tenure, but no one can say how many of those planned jobs have become reality.

Many employers won’t fill those jobs for years. Some plans will simply fall through – and have already in at least three cases.

“When we announce jobs, it’s really a pipeline. The job doesn’t come until the market is ready,” Commerce Secretary Bobby Hitt said. “There’s a difference between announced jobs and payroll.”

Haley’s office bragged Dec. 11 of surpassing 40,000 new jobs with 301 economic development projects.

“40,000 new jobs is a big deal for South Carolina and the hardworking people of this state and there is nothing we won’t do to keep adding to this number,” she said in a news release, which was accompanied by a YouTube video.

As of Thursday – 11 announcements later – 312 projects have promised a combined 38,536 jobs since Haley took office Jan. 12, 2011, according to a list from Commerce. The administration reached 40,000 last month by adding 4,000 Wal-Mart jobs and 350 at a rebuilt Tanger Outlet in Beaufort County – retail work that Commerce doesn’t incentivize or recruit. Haley attended the Tanger grand opening in March 2011 and announced two months later that the Wal-Mart jobs would come over five years.

The announcements range from three jobs at a plant expansion in Chester County to 2,000 jobs for a Boeing expansion in North Charleston. A quarter of the announcements commit to bring 25 or fewer jobs. An additional 18 projects show no jobs at all – six of which are receiving upfront infrastructure grants from the state.

Commerce spokeswoman Allison Skipper said some businesses opt not to declare the jobs they’ll add. In other cases, incentives are approved for retained jobs, she said, without specifying which applied to the announcements the AP questioned.

Announced jobs don’t always represent job openings. In the past year, at least three companies border-hopped to South Carolina, taking advantage of local and state incentives to move a few miles from south Charlotte. The moves were touted as bringing more than 1,200 combined jobs. For most workers, it meant a slight difference in their commutes.

Commerce officials say that even if the jobs aren’t new, companies moving from a bordering state benefit the community by paying state and local taxes in South Carolina.

Hitt acknowledged that no one regularly follows up on announcements. Companies generally have five to seven years, depending on their agreement with the government, to fulfill their job and investment projections.

“Would it be helpful for us to be calling them every year for the next five years to see how many people they employ this year, as opposed to waiting for them to meet their contract? I don’t know that that would be a good use of state resources,” he said.

The state’s main incentives fall into two categories: grants that pay for infrastructure improvements and tax breaks that don’t kick in until the state certifies a company has met its targets. Roughly half of the announcements came with state grants approved by the Coordinating Council for Economic Development, according to a separate list from Commerce.

The state threatens to “claw back” that money if a business doesn’t meet its goals. That’s never been done in Haley’s administration, partly because the process can’t start until a company’s contract deadlines have expired.

One of Haley’s big announcements early on was Amy’s Kitchen, an organic frozen food producer that promised in 2011 to create 700 jobs in Greenville over six years. That project fell through – and Commerce removed it from the list – before its approved grant was ever paid, Skipper said.

Two projects that fell through in rural Barnwell County are still on Commerce’s list, as well as their 330 jobs. Skipper said their deadlines didn’t pass until Dec. 1, so a review has just started.

In the case of NK Newlook, which was supposed to employ 212 people in tiny Blackville, the state awarded a $200,000 grant in 2011 for building upgrades. The company opened, but then lost a major contract and had to close. The money went into the building, not the company, so it’s better prepared for the next prospect, Hitt said.

“You’re going to have those things happen with small companies. They happen all the time,” he said. “The asset is still here. The money has not been lost.”

The state must be willing to take risks in rural areas, Hitt said. Haley, who grew up in rural Bamberg County, has stressed recruiting in rural areas and frequently touts that projects have been announced in 45 of the state’s 46 counties.

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