As South Carolina leaders wait to see if Volvo chooses the Palmetto State to build a $500 million plant, Gov. Nikki Haley said Tuesday she does not need legislative help to pay for an incentives deal for the automaker.
The Republican governor told GOP state senators Tuesday she did not need a borrowing bill passed to pay for economic development obligations, said Senate Judiciary Committee Chairman Larry Martin, R-Pickens.
Haley indicated she and the state Commerce Department already have enough resources to persuade Volvo, threatening to veto a bond bill proposed by Senate President Pro Tempore Hugh Leatherman, R-Florence. Leatherman’s proposed borrowing plan could include money for workforce training as well as incentives.
Even without that borrowing, the Commerce Department can offer industrial prospects an array of incentives, including money from a deal-closing fund.
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The General Assembly appropriated $45.4 million for the closing fund this fiscal year, which ends June 30. The Commerce Department does not disclose how much it has committed to unannounced projects, said spokesperson Allison Skipper.
The state also could tap into another pot of money for site improvements or offer tax credits for jobs created, rebates of a portion of new employees' state income taxes.
The Commerce Department also could request using economic development bonds to pay for incentives, which would require approval from the Joint Bond Review Committee, and Budget and Control Board.
Those bonds could pay to buy land, make transportation improvements, expand water and sewerage service, and train employees.
To qualify for the bonds, economic-development projects must promise at least a $400 million investment and 400 new jobs. Volvo, reportedly interested in a Berkeley County site, would invest $500 million and create up to 4,000 jobs over 10 years.
State Sen. Larry Grooms, R-Berkeley, said Tuesday lawmakers do not need to pass legislation to pay for any economic incentive deal.
But, he added, if the state strikes a deal with Volvo, lawmakers likely would need to add money to funds that the state uses to attract businesses or state Commerce officials would run into “cash-flow problems.”
Typically, manufacturers pit states against each other to secure incentive packages, including tax credits for jobs created, free land and other perks.
The identity of the other state vying for Volvo has not been confirmed. However, most attention has focused on Georgia, where legislators just approved $25 million for a new worker training center near Savannah.
Staff writers Jamie Self, Andy Shain and The Associated Press and The Atlanta Journal Constitution contributed.