Curbing Economic Development Incentive Excesses

By Paul Gable

A bill prefiled with the S.C. Senate last week could go a long way toward limiting the excesses of economic development incentive agreements between government and private business.

1. 134, with senators Tom Davis and George Campsen as sponsors, would tighten down on not only what, but how governments can give away public money as an economic development incentive.

Most importantly, it would make the process transparent so the taxpayer could see in advance just how much public money is being thrown at a company to relocate, or expand its business.

I particularly like the following two sections of the proposed bill:

Section 12-66-110.    Before approving a tax incentive agreement or subsidy agreement that exceeds one hundred thousand dollars, the grantor of the tax incentive or subsidy must provide public notice and a hearing. The public notice must identify the date, time and location of the hearing, and location at which information about the subsidy is available. The grantor must provide at least a five day notice for the public hearing.

Section 12-66-120.    Any business seeking a state or local tax incentive or subsidy exceeding one hundred thousand dollars over a five year period must submit a written application that will be made available through the Department of Commerce’s website. Any business seeking a state or local subsidy that, when combined with applicable tax credits, exceeds one hundred thousand dollars over five years must submit a written application that will be made available through the Department of Commerce’s website. Once the application is received and made publicly available by the state or appropriate locality, there shall be a waiting period of thirty days, during which time a public hearing on the subsidies shall occur.

The bill would also prohibit businesses receiving economic development incentives from making campaign contributions to politicians.

It’s well past time to remove economic development incentives from backroom and executive session discussions and get them out in the sunlight where every taxpayer is aware of how public money is being spent.

This bill would also eliminate the bogus claims made by politicians at election time of their great contributions to economic development.

I can only imagine how Horry County taxpayers would have raised their voices if they knew in advance the many giveaways through the years to AvCraft. Of course, in that particular example no jobs have been created either.