SC rates low in disclosing business incentives

01/29/2014 8:05 PM

01/29/2014 8:06 PM

South Carolina ranks 45th in the nation in disclosing online the subsidies and credits it gives to companies that locate or expand here.

The Palmetto State received a score of only 1 point out of 100 from the Washington D.C.-based Good Jobs First organization. It is tied for 45th with Hawaii and Nevada.

South Carolina scored only for listing the job development credits given to companies for creating jobs.

“You have the bare minimum of disclosure,” said Philip Mattera, research director for the left-leaning watchdog group. “South Carolina gets the lowest possible score that’s not zero.”

States were judged on online disclosure of five categories:

•  Economic impact zone investment credits, which allow manufacturers locating in Economic Impact Zone counties a one-time credit against a company’s corporate income tax of up to 5 percent of a company’s investment in new production equipment
•  Governor’s closing fund, cash controlled by the governor that can be used to seal deals
•  Job development credits, which provide companies with funds for up to 10 years to offset the cost of locating or expanding a facility
•  Job tax credits, which provide companies with tax credits for each job created
•  readySC training program, which trains workers for specific jobs with specific companies at no charge to the company

The state scored its one point for posting online raw amounts of funds given out for job development by companies, and listing the companies. However, the website doesn’t list the number of jobs or the amount of subsidies they received per company.

“It’s hard to get good information in South Carolina, particularly if you try to include state and local incentives combined,” Mattera said.

A spokeswoman for the S.C. Commerce Department said the state also lists on its website an annual report, as required by law, of how much money is disbursed by the S.C. Coordinating council for Economic Development. However, those are gross amounts for different funds for the year, and does not list the companies that received them or how much they received.

Allison Skipper also said that incentives packages are announced in press releases if they are used for new company facilities or expansions.

“The Coordinating Council provides an annual report of its activities to the Legislature, which is also readily available online,” she said. “In addition, Commerce discloses incentive information in its news releases for projects where incentives have been approved. This includes grants and job development credits, which are discretionary incentives approved through the Coordinating Council.”

But Ashley Landess, executive director of the S.C. Policy Council, a Libertarian-leaning watchdog group that opposes many incentive programs and has pushed for full disclosure of those that exist, said that the Good Jobs First report “only scratched the surface.”

“There is no disclosure on the front end,” she said. “The public is never included (in the negotiations) and we have no input. These incentives are negotiated behind closed doors by a handful of politicians and often lobbyists. There are announcements with very little detail and after that, nothing.

“What about bond deals, the cash, the land giveaways and the local incentives?” she said.

She added that the state also doesn’t disclose which companies fail to make their goals for the incentives and if the money is ever recouped.

“Of the 40,000 jobs (Gov. Nikki Haley) has announced, we have no idea how many have materialized,” she said.

Good Jobs First is backed by labor unions and the report was distributed locally by the S.C. Progressive Network.

The report showed that Arkansas, Delaware, Idaho and Kansas finished last, scoring no points. Illinois, Michigan, North Carolina finished first, second and third with scores of 65, 58 and 48 respectively.

Mattera said that most states do a poor job of reporting incentives online and the reports from state to state are “wildly inconsistent.”

He added that South Carolina citizens should be more concerned about transparency because the state is “very aggressive” when it comes to offering incentive packages.

“If only for the Boeing deal, South Carolina has to be considered among the more aggressive states to offer subsidies,” he said.

He noted that North Carolina, while also aggressive in offering subsidies, also has one of the best online reporting systems.

“It’s an interesting contrast,” he said. “If North Carolina can do it, why not South Carolina?”

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