Editorial: Richland County going too far with tax breaks for apartment complexes
03/22/2014 9:00 PM
03/21/2014 4:26 PM
RICHLAND County Council is treading on dangerous ground by stretching the definition of economic development to extend tax breaks to large apartment complexes.
It makes no sense to redirect hundreds of thousands of dollars in taxes annually that should go toward city and county services and schools in order to incent projects that are going to be built anyway and aren’t likely to produce jobs.
In the past, we’ve endorsed limited, reasonable local incentives to help private interests develop blighted areas or redevelop key property that would otherwise sit dormant, yielding little or no property taxes. One such instance was when Columbia gave a developer $1.6 million to help transform the Confederate Printing Plant into a Publix, to help boost the once-blighted Congaree Vista. Mast General got similar assistance via stimulus funds when it moved to Main Street as part of the effort to spur downtown revitalization.
We even were willing to consider the county’s discussion about extending tax incentives to Costco, but we never found out enough to know whether it would have been one of those rare exceptions when a subsidy was justified for retail.
But granting years-long property tax breaks to apartment complexes goes far beyond acceptable limits.
County Council recently voted to extend a multi-year tax break to the owners of a 600-bed student apartment complex at Blossom and Huger streets; the owners could see their property taxes cut in half for the next 10 years. The council is expected to approve two more such deals. If so, the owners of the three downtown student apartments could save more than $10 million in taxes that should be going to help fund basic services.
Historically, counties have used tax breaks to lure corporate headquarters and manufacturers that create large numbers of new jobs. We can’t understand why council members want to extend the perks to private dorms as well as big retail developments.
If the council opens this door, it will be inundated with requests from developers seeking incentives. And no matter what level of investment the county requires — in this instance an investment of at least $40 million that would pay at least $750,000 in property taxes — exceptions will be sought, whether by a council member on behalf of a favored project or by investors declaring theirs is a special case.
Creating such a wide-open policy is troublesome and illustrates, in part, why we oppose special tax breaks to recruit and subsidize retailers on the state level: Retail traditionally brings low-paying jobs. When government provides an incentive to those businesses, it gives them an edge over competitors, and opens the floodgates to others demanding similar treatment.
We never anticipated counties would offer incentives of this kind to retailers, let alone apartment complexes. And they shouldn’t.
Richland County’s economic development committee members say they’re willing to offer incentives to multimillion-dollar investments because local taxes are high.
If that’s the case, then here’s a novel idea: Lower the tax rates; we’re sure all taxpayers would welcome the relief.
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