The biggest economic incentive package in South Carolina history got even bigger Tuesday when the S.C. Joint Bond Review Committee authorized the sale of $100 million worth of general obligation bonds for Boeing’s Lowcountry aircraft assembly plant.
This, of course, is on top of the $170 million that S.C. lawmakers awarded the company during a special legislative session last October.
Another $60 million could be coming on top of that, too, according to a report published on the new S.C. Policy Council website, The Nerve.
That would take the current total of the Boeing incentives package to $330 million – and that’s just what’s been made public thus far, as the S.C. Department of Commerce has not released an estimate on the cost of corporate and sales tax breaks extended to the company in exchange for deciding to locate its second 787 Dreamliner assembly plant North Charleston.
From The Nerve:
Besides the $100 million in bond sales, the Joint Bond Review Committee this morning also unanimously authorized the $170-million portion of the bond package for Boeing. If the state Budget and Control Board on Wednesday signs off as expected, the bonds would be sold later by the state Treasurer’s Office through bids.
No committee members mentioned during this morning’s meeting how much interest taxpayers will be on the hook for in addition to the $270 million in principal payments.
“I don’t have those figures anymore,” Senate President Pro Tempore Glenn McConnell, R-Charleston, a committee member, told The Nerve afterward.
Asked the same question, state Department of Commerce Secretary Joe Taylor, who is not on the committee but who attended the meeting, also didn’t have any answers, referring The Nerve to his spokeswoman and the state Treasurer’s Office.
The Nerve’s investigation of the $170-million portion of the bond package found that the total taxpayer cost of those bonds could run anywhere from about $250 million to at least $330 million, based on prior bond sales and an internal Treasurer Office’s analysis.
The $170 million was authorized under a section of the S.C. Constitution that sets no debt ceilings for general obligation bond sales. Of the other $100 million authorized this morning, $50 million was approved under a state law that limits certain bond debt, including economic development bonds, to 5.5 percent of general fund revenues from the previous fiscal year.
The other $50 million was authorized under another state law to help companies construct “suitable air carrier hub terminal facilities” in South Carolina.
Besides the bond package, Boeing also will receive millions of dollars in corporate income and sales tax breaks under the Oct. 28 legislation. State Department of Revenue and Commerce officials have declined to tell The Nerve how much that will cost taxpayers, contending those incentives are considered private tax records under state law.
State lawmakers and agency officials repeatedly denied The Nerve’s written requests over the past two months for specifics on the Boeing incentives package. They often have cited an exemption in the state’s Freedom of Information Act that allows details to be kept secret until the deal is finalized, which officials have said could take up to a year.
Wow …
A release from the S.C. Policy Council accompanying The Nerve story didn’t mince words, either.
“Legislative Leaders Misled Public on Boeing Deal,” it says.
For the origins of the tit for tat between the Policy Council and lawmakers over Boeing, click here and here.
As we’ve said previously, we continue to support this particular deal (or at least the details of it that have been made public so far).
Our point all along, though, has been that state lawmakers need to keep their eye on the ball as it relates to job creation, something they have failed miserably to do in the past.
That means focusing more on a climate that will foster job growth among entrepreneurs and small businesses and less on picking winners and losers in the marketplace.
UPDATE: Also, props to former La Socialista reporter Rick Brundrett for a solid “pop out the box” in his first article for The Nerve.
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By Ynotfirst January 12, 2010 at 4:24 pm
Go Nerve!
By Huhhh??? January 12, 2010 at 4:46 pm
Looks like the only taxes being paid by anyone connected to Boeing will come from the workers.
By Rylyn January 12, 2010 at 8:24 pm
Who cares. We need the jobs and any tax money they pay will be more than we were getting before they came. And how about all the other industry that will come with it not to mention the retail jobs that will open up because they are here. Get your head out of the clouds or (out of wherever it is) Sometimes you have to give a little to get a lot. This is the only reason they came here instead of going to Washington state. Don’t you think the people who get the jobs would rather be employed and paying taxes than unemployed?
By No Way! January 12, 2010 at 9:30 pm
Let’s get for real! This is a major win for Charleston. There is no chance that we are going to come out in the red here. With Boeing and affiliated companies relocating here, we can only win. You can’t rain on my parade.
By the way, this is not over until we deliver the rest of the corporation from the Union Bosses!
By FITSNews January 12, 2010 at 9:41 pm
We tend to agree. We think the deal will pay off but here are two quick points to consider …
1- We don’t think SC had to give away as much as it did to land the deal. Boeing was getting squeezed by unions in Washington and the right to work status of our state is the real reason they made the call.
2- This is a lot of up front cash – i.e. a lot of risk.
3- (As we’ve said many times) one big deal every fifteen years isn’t going to cut it. We need to focus MUCH more on the underlying climate, which can pay dividends on a daily basis for the businesses that create 95 percent of jobs in SC – small businesses.
4- At the end of the day, this is a good deal but there are bad deals (i.e. Sembler) out there … lurking.
-FITS
By Laura Campbell January 12, 2010 at 10:41 pm
In national news today, Obama wants 33 billion dollars for war.
Perhaps the same scientists who made the fruit flies gay discovered how to grow a money tree because our government seems to think that’s where money comes from.
Really, state or national, where is it coming from?
By Marvin January 12, 2010 at 10:46 pm
There is no doubt there are worse deals than this one. Sic is right about that. The problem is that our taxes and spending are too high, so if we lower them for one company, then others have to pick up the tab.
Politicians promise everyone job growth and higher incomes, but they can’t seem to tell us how or when it will happen. Most of us would rather support the businesses that serve us directly.
Boeing would be better off if we eliminated the corporate taxes on all businesses. And if the Boeing deal were good for everyone, think about how that was decided, and by whom. Behind closed doors by a few politicians.
The free market works when it’s “free” of interference from government. When politicians get to decide which companies get tax relief, that’s something other than the free market. And it’s not nearly as good.
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