Two months ago S.C. Gov. Nikki Haley’s administration touted Element Electronics’ decision to bring 500 new jobs to Fairfield County (dissing Sumter, S.C. in the process).
It was “a great day in South Carolina.”
But did you know the total amount of taxpayer-funded incentives awarded to this company will wind up being more than twice the company’s capital investment? And did you know that the head of the company has been accused of receiving millions of dollars from a massive Ponzi scheme?
Of course not …
“The company will be given job creation credits and a rural infrastructure grant of $1.3 million,” the Associated Press reported at the time of the announcement, citing the company’s $7.5 million capital investment.
The AP (a.k.a. Haley’s press office) neglected to mention the rest of the incentive package, though. Or the legal troubles surrounding the company’s president Michael O’Shaughnessy.
Over the fifteen-year duration of the deal, the company will receive $14.8 million in government subsidies according to reporter Rick Brundrett of The Nerve.
And guess what: Brundrett’s analysis doesn’t include perhaps the biggest incentive Element Electronics will receive – a property tax break that will wind up shifting the tax burden even further onto local residents and existing businesses.
Such anti-competitive deals are par for the course in the Palmetto State … in fact they have ramped up dramatically under Haley. But no one ever talks about the flip side of all this “economic developing” – the cost to taxpayers and the families and businesses struggling to make ends meet.
And that’s the great con …
“Economic development” in South Carolina is nothing but government stealing your money and using it to bribe select companies to locate here – at which point you continue to pay for this “investment” in the form of higher taxes.
It’s robbery … for which our elected officials are rewarded with glowing headlines from the mainstream media (and usually a few campaign contributions to boot).
And judging by our state’s shrinking income levels and contracting workforce – it’s not working.
17 comments
One of the oft-stated goals of economic development is to “broaden” the tax base so that local taxpayers don’t bear the full cost of local government and schools. But then they cut deals to lower that burden on new industry, and we are then told the advantage is the wages workers receive and the income taxes they will pay.
It is bait and switch.
Exactly………
It pains TBG to offer kudos to someone with your avatar, but you, sir, nailed it.
its one of those theories that works in a classroom (utopia). So Im proud some in our general assembly was able to understand such simple concepts.
But anybody with a brain bigger the Nicki’s fun button also knows such theories fail miserably in real life because its…. real life!
Same concept applies to Keynsian Economics.
You know the interesting thing about your comment is this:
I’ll bet if someone had the ability to truly research every job announcement by our glorious Commerce Dept. that you would find that not only are the “jobs” overstated, but so is the supposed investment dollars.
I’ve a sneaking suspicion that every single announcement has elements of fabrication.
I get around the state fairly well and watch these announcements so I can follow up when I travel. I can tell you that several of them in the last few years have NOT come to fruition.
Here’s just one example:
http://sccommerce.com/news/press-releases/gkn-aerospace-announces-new-facility-orangeburg-county
250 jobs, $38 million dollar investment according to Haley/announcement, right?
The “start up” date was supposedly mid-2012.
I can tell you I drive by that “plant” from time to time. The last I checked just a few months ago…empty…STARK EMPTY.
This is not an isolated incident, I read these bullshit announcements all the time and follow up because I have business interests in them. It’s almost routine.
How can anyone get info from the company on why they haven’t fulfilled their promises? You can’t easily. Look at Walmart stonewalling Sic.
What about Amazon?
Do you think anyone over at the Department of Commerce is going to willingly acknowledge that many of their “announcements” are bullshit? Or the governors office?
How does this affect their tax breaks? (for those that say actual start up, but still don’t fulfill their commitments)
It’s all so disgusting. Pols shouldn’t have the power to pick and choose tax rates for any individual or corporation, it seems so obvious…yet isn’t to many-they argue it’s necessary to land big corps yet in their central planning delusions of omniscience ignore the role of small business in job creation.
Almost worse, it’s a situation ripe for corruption, as proven over and over again by our pols.
If Nikki’s hips get any wider her arms will be so far out she will rise up like Mary Poppins — can anyone say “Supercalifragilisticexpialidocious” ………….
Chitty, chitty, bang bang…..we luv U….
tittie, another tittie, and bang that thang! ……HAW!
The only way businesses will relocate to this GOP “Business
Utopia” called South Carolina is with bribery.
We’ve spent 30 years creating a “great business climate,” and we still
need pay-offs to win new jobs. Doesn’t
that tell you something?
Yes, it tells me that lower taxes for a few large corporations that successfully ply our corrupt pols with lobbying dollars & back room deals aren’t that effective.
Better to lower taxes for all business and be known as a truly “business friendly” state rather then a haven for crony capitalism.
It also tells a tale on the Republicans who dominate all aspects of political life in this state and exploit the ignorant and gullible voters to perpetuate a system of corruption and cronyism.
Hate to break it to ya bro, but it wouldn’t matter if Democrats were in charge. It would be close to the same exact thing.
You’ve got to free yourself from this two party paradigm. Dems or Repubs is not the answer.
Only you mentioned Dems. I say we start over. The Dems in this state are irrelevant.
How should Nancy Mace use this article instead of the Obama-care topic she whines on …!
FITS says; “But no one ever talks about the flip side of all this “economic developing” – the cost to taxpayers and the families and businesses struggling to make ends meet.”
How about talking about the flip side of the billion+ New Market Tax Credits Sen DeMint secured for Greenville over the past 10 years. So, was Greenville successful at a cost to the rest of SC taxpayers and businesses? A failure that needs to have $1 billion+ returned?
What say you FITS? Any comment or opinion on the effects of the billion $$$$s Greenville received?
The flip side is do nothing and the taxpayers fund more welfare, food stamps and unemployment and watch their home values plummet.
Damned if she does and damned if she doesn’t. At least she’s doing something and there’s a lot to be said for bringing 500 American jobs back from China.
If she’s going to “do” something, then she should just lower taxes for everyone and every business no matter how big or small.
Instead she’s picking and choosing, probably based on who brings more money into her re-election coffers or which pols have been paid off that are owed favors.