SC’s Clyburn targets Scott’s anti-poverty plan, aims to ax benefits for rich investors
South Carolina’s most powerful Democrat is taking aim at legislation championed by one of his Republican colleagues, promising to tighten up an anti-poverty program that he says disproportionately benefits rich investors.
U.S. House Majority Whip Jim Clyburn, D-Columbia, announced Wednesday he is filing legislation to restructure the Opportunity Zones program that was introduced and championed by U.S. Sen. Tim Scott, R-North Charleston.
But Scott said Wednesday that Clyburn’s plan would “wreck the Opportunity Zone initiative under the guise of ‘improvement.’” The Palmetto State’s junior senator acknowledged issues with some opportunity zones but said Clyburn’s plan would eliminate the program in multiple areas with high poverty rates.
The program was part of the massive 2017 tax reform law that provided millions of dollars in tax breaks to help develop low-income areas across the country. The opportunity zones clause was championed by Scott, the Senate’s only black Republican.
The program offers incentives for economic development in the country’s poorest areas, including parts of South Carolina. It allows investors to sell their investments and avoid paying a capital gains tax if they use the proceeds to benefit opportunity zones.
But opponents of the program claim loopholes in the law lead to gentrification and disproportionately benefit rich investors as they descend into areas to build luxury apartments and other high dollar projects. An investigation by The New York Times showed that much of the money pouring into opportunity zones goes to expensive housing, hotels, student housing and storage facilities that require few employees.
“From the start, I’ve raised concerns that the Opportunity Zone incentive would turn out to be a tax credit for rich investors with limited benefits for low-income communities,” Clyburn said in a written statement. “This program needs to be tweaked if it is to accomplish its stated purchase, and this legislation makes the necessary reforms to ensure it is making an impact in the communities that need investments the most.”
In a written statement Wednesday, Scott accused Clyburn of playing partisan politics while acknowledging that he didn’t agree with how some opportunity zones were picked — mainly, he said, by Democratic governors.
“Instead of trying to take down Opportunity Zones because of their distaste for President Trump and our successful tax reform package, I invite Democrats to come to the table and work together on a path forward,” Scott wrote.
Clyburn’s bill, which was introduced Wednesday with Democratic U.S. Reps. Alma Adams of North Carolina and Lacy Clay of Missouri, would eliminate incentives for investments in projects like stadiums, casinos, parking lots and luxury apartments.
Clyburn’s legislation also would allow only low-income areas to be designated opportunity zones.
“Initially, this unique program showed significant potential to re-energize our communities, but I remain concerned that without the necessary guardrails there is little to no guarantee the program will benefit our constituents in the selected opportunity zones,” Adams said in the statement. “My district of Charlotte-Mecklenburg is home to 17 opportunity zones and the underserved residents in those communities deserve the intended vision of economic revitalization, job creation, and sustainable investment.”
Scott said Clyburn’s bill would also eliminate incentives for health centers and workout facilities, like YMCAs.
“This is absolutely egregious, as we should be looking for ways to help improve the health of folks living in zones, where the average life expectancy is three years shorter than the national average and the average obesity rate is significantly higher than the national average,” Scott said. “Yet again, we are left with the impression that those writing these bills simply have failed to understand both the complexities of improving opportunity in low-income communities and the goals of the Opportunity Zones initiative in the first place.”
This story was originally published November 13, 2019 at 11:01 AM.
