SC’s job-recruitment efforts cost $100 million-plus a year, and work, senators told
S.C. Commerce Secretary Bobby Hitt defended Thursday the taxpayer money spent to bring Element Electronics to Fairfield County, weeks after the Minnesota-based TV-maker said it would shutter its Winnsboro plant because of Trump administration tariffs.
Bringing jobs to the poorest regions of South Carolina requires taking chances on smaller companies that don’t always pan out, Hitt told a panel of state senators.
“Somebody has got to take a risk, and I guess that’s been left to me,” Hitt said. “If they go away, I would be comfortable looking at you and saying, ‘We created 130 jobs for almost four years.’ I’m satisfied. I’ll take those risks because I don’t know what else to do.”
Hitt’s comments came as a state Senate oversight panel reviewed a study showing the Commerce Department has spent more than $321 million over the past five years — about $65 million a year — to lure companies to South Carolina or entice them to expand. That grant money goes to S.C. counties to help them land jobs.
Over the past two years, a state program also has refunded about $80 million in state income taxes paid by companies’ workers — or $40 million a year — if those firms met their investment and job-creation goals.
Those figures — more than $100 million a year from just two state programs — do not include the hundreds of millions of dollars the state’s 46 counties give companies to locate or expand in South Carolina. The state’s counties gave at least $221 million in tax breaks to private companies in 2016.
Hitt told the Senate panel the state’s jobs strategy — heralded for landing BMW in the 1990s and, more recently, Boeing, Volvo and Mercedes-Benz — is working.
The Senate committee’s study showed that, in 2016, the Commerce Department helped attract companies that promised to create roughly 13,100 jobs in South Carolina, including nearly 3,600 in rural areas.
But recruiting industry to rural South Carolina has been difficult, Hitt told the senators, becoming emotional at one point. And some economic-development deals don’t work out.
Over the past five years, the Commerce Department’s grant-awarding council has had to claw back about 2.7 percent of the money it has awarded in grants — $8.7 million — after companies failed to meet capital investment or job creation goals.
Element in Winnsboro, for example, was eligible for tax credits through a state program but received none because the TV-maker fell short of the 500 jobs it was supposed to create. Element has indicated it would eliminate 126 of its 134 jobs if it is not exempted from a Trump administration tariff on imported Chinese TV parts.
Hitt said he had identified five rural counties — which he did not name — where the Commerce Department might try new strategies to create jobs.
“We’ve had a great run” in attracting jobs to the state, Hitt said. “But we have counties that have not enjoyed (success) – and it’s not because we haven’t tried.
“We celebrate when we put a plant in a rural county.”
This story was originally published August 23, 2018 at 3:42 PM.