HAS SOUTH CAROLINA’S GOVERNOR WRITTEN A CHECK HER ADMINISTRATION CAN’T CASH?
|| By FITSNEWS || “To borrow or not to borrow …”
That’s the question S.C. governor Nikki Haley must answer in the aftermath of the Palmetto State “winning” Volvo – whose Chinese owner Li Shufu is the latest recipient of a nine-figure crony capitalist handout courtesy of dirt poor South Carolina taxpayers.
We obviously oppose such handouts on principle … to say nothing of the fact they haven’t worked.
Of course that hasn’t stopped our “Republican” leaders from doling them out like candy.
South Carolina’s up-front promise to Volvo is a whopping $120 million – most of it for infrastructure (and a highway interchange). There are additional incentives to come, but this is the amount of money the state must come up with to consummate its marriage.
Haley has previously said she doesn’t need the S.C. General Assembly to seal the Volvo deal. In fact her legislative liaison, Katherine Veldran, reiterated as much in text messages to state lawmakers this week.
Here’s the problem …
The state’s bonding capacity for “economic development” is nearing its limit. Haley has about $50 million she can play with, but that leaves a $70 million hole in order to complete the first phase of Volvo’s “incentive” package. Powerful S.C. Senate president Hugh Leatherman inserted this $70 million in a bond bill that his chamber was prepared to pass, but he removed the money once Haley said she didn’t need it.
That means Haley is in a box …
“She needs the General Assembly to pay down $35 million in debt to leverage another $35 million,” a legislative leader familiar with the ongoing negotiations tells FITS. “That means paying interest only for next five to seven years – a practice that was widely accepted in the mid-2000s but disbanded after the great collapse of 2008.”
Haley is bringing this “risky business” back, though …
After railing against deficit spending earlier this year (in contrast to her prior position) – Haley now wants to tap out the state’s economic development bonds by borrowing up to the limit and paying interest only to stay under the constitutional cap.
“Interesting that the governor who opposes all borrowing is actually for risky borrowing,” one GOP leader told FITS.
Very interesting …
Also interesting? If the S.C. General Assembly doesn’t take action to pay down the $35 million, Haley will be unable to deliver on her promise to Volvo.
“She is counting on lawmakers to do this,” one legislative leader told FITS.
Should she, though?
Haley has been belittling legislators all year – blasting them especially hard when it comes to deficit spending. And now, adding insult to injury, she’s telling them she doesn’t need their help to seal the Volvo deal – even though it’s abundantly clear she does.
We suspect lawmakers will approve the deficit spending, but if they decide not to … Haley could hardly blame them.
Again, we reject crony capitalist handouts on principle. They are patently unfair, and South Carolina’s escalating use of them to reward favored corporations at the expense of small businesses and taxpayers is killing our state’s consumer economy.
Also, the last time we checked South Carolina wasn’t supposed to engage in deficit spending for any reason … least of all to stroke a nine-figure check to a Chinese billionaire who is more than capable of subsidizing his own manufacturing facility.
Turn her away. She has the emotional maturity of a child and should be treated as such.
??????? $73.. per-hr @mi22//
Some Vagisli would help with that. Oh you said Volvo, nevermind.
Did you mean to say “Vagislip” ..??
Will Folks should have told Boeing how bad finances in SC were before they spent $212 million on a paint facility that opens in 2016. Folks has told us that Boeing will blow town, so why are they spending that money? And by the way the P&C is reporting that a market analyst believes Boeing plans to move ALL 787 production to Charleston. I don’t recall reading that on FITSNews.
Charleston Boeing can’t handle it, fool.
Antidotal comments aside, Boeing is growing and is a major (and positive) influence in SC’s economy. Like BMW and others.
We need a handful more of “anchor” manufacturing entities in SC and once we get them we will be ready, as a state, to flourish.
ROFLMAO!!!!! Sheeshus, are you being paid by Nikki Skanks office???
“And by the way the P&C is reporting that a market analyst believes Boeing plans to move ALL 787 production to Charleston.”
You were making good points until you mentioned this little nugget of will-never-happen.
Why would you say it will never happen? Did you know that Boeing was going to build any 787’s here 10 years ago?
Fits lies about Haley’s position on debt. She has never said the state should never borrow. She said the taxpayers don’t want more debt. The vast majority of new debt incurred during her term is not to be repaid with taxes. It is to be repaid with college tuition and fees. Also the state unemployment rate has since dropped 3.9% and has surplus revenue. That impacts any decision to borrow.
“That is a state responsibility.”
I don’t get how Will thinks any of these employees will get to work, the parking lot that Volvo puts in has to connect to a public road at some point. Once that connection is made it becomes the responsibility of the state to figure out how to deal with the traffic that it will create. That doesn’t mean just employees driving to work, but delivery trucks coming in with parts and going out with cars. If this is a new area zoned for like businesses then the state must take future growth into account or it will have to spend even more money down the road.
If a state can’t accommodate a business like that, then that state is not competitive and will not attract businesses. Worse, it will be inept at accommodating the businesses it already has, and they will suffer for it.
Yeah, “anybody can use it” to get to the Volvo plant, assuming more than a few hundred South Carolinians need to go there.
What about the 2000 to 4000 employees? All the suppliers making deliveries… The remainder of the industrial park that South Carolina owns. I am sure there will be a “frontage road” that can extend access to other properties for use by other crony capitalists.
This is where the gas tax money was going all along. Home girl knows how to buy influence.
Yeppers. Now we know the real truth.
“….a $70 million hole….” no pun intended I’m sure
South Carolina does not need Volvo. It will not create jobs for locals. All it does is attrack out of state scums to relocate here. And SC doesn’t need that. Already because of Boeing, crime has been, in part, increasing because of it. People from other states are coming here and not finding work. Hence, the crime increase.
I work at Boeing and half my graduating class works there. Local businesses are in their daily. I make a good living. I have been promoted and I love my job.
Volvo will do a lot for the low country. The General Assembly can screw this up, but they should remember that next year is an election year.
Bullshit. You lie. And if you do work at Boeing, you are only being paid 15 dollars an hour. I know hundreds who work there. So this enables me say, that YOU are full of shit.
“And SC doesn’t need that.”
What, pray tell, do we need, mister expert?
Jaguar Land Rover turns down Windsor, Canada for new plant. Probably building in Mexico
The time is right for us to get this manafacturing company. History teaches us that the next economic downturn is not far off. Economics is all about cycles and we need to take advantage of this one RIGHT NOW.
Volvo needs us, our port, our labor, our railways. We need them for jobs, tax payments and spinoff business creation.
This conservative is not fond of incentives but in this case I can stomach them. The timing is crucial and we need to strike while the iron is hot
“Volvo needs us, our port, our labor, our railways. We need them for jobs, tax payments and spinoff business creation.”
So what kind of tax payments will the be making? The same as BMW? What happens when the incentive money dries up and a tax bill comes to them?
Or are you referring to the supposed 2000 employees that will be paying tax? How many years will it take for these 2000 employees to pay in taxes before the hundreds of millions of taxpayer dollars spent become a break even?
“rebuilding and rebranding”-Bobby Hitt commenting on Volvo….nice big fat taxpayer gamble.
I’d prefer him and Halye hit the slots in Vegas with camera’s on them.
2000 jobs isn’t earth shattering btw in the context of a population of millions, and that’s assuming Volvo actually does hit that figure…going back to all the press releases by Haley & the SCDOC you’ll be challenged to find 50% of the releases touted jobs actually occurring.
Not only that, but Chinese companies, similar to Japanese(but even worse really) don’t like using outside vendors for important projects. They send that work home and then ship it back here.
Folks…would you say she has a great big ol’ volvo….that’s sort of been used a lot…or would you say she has tiny little volvo that is hard to get into?
Will: ” Give me your lips, your eyes, your hair!”
Nikki: “Leave my ears – I’m expecting a phone call.”
This spin represents the worst of the General Assembly and of course Leatherman is behind it all. Leatherman is using Volvo to force the conservatives to sign on to his wasteful bond bill and this is part of that effort. If they won’t pass his bond bill he will screw up the Haley Volvo effort.
So pick your sides—Haley and Volvo or Leatherman and another $300 million down the big government rat hole.
Manufacturing jobs are important to SC for many reasons. Our workers are best suited for it and to believe otherwise is foolish. The cluster of counties around the Volvo plant desperately need the jobs and the state needs the increased tax base. Sure, it cost money, but so do failing schools, crime, public aid, etc.
We have a budget of almost 28 billion dollars. It is full of waste and insider dealing. Seems like somewhere in it we could find money to produce good paying jobs for people, many of which live along the I95 corridor.
Our budget has enough wasteful spending in it to incentivize 5 Volvo plants, but hey thats not what puts money in the pockets of the rich and powerful.
Check out the salaries at SC State College. Its a good indicator of waste and fraud.
Don’t tell DNR.
I say we pay for Volvo with cash out of the extra 400 million dollars the State has this year. Pay for it and be done with it.
That keeps the state from wasting it on some horse crap.
Beating the cockroaches at their own game? I’m down with that.
I say if she needs the legislature to give her the money they should tell her she can have it, but she has to ask for it in writing, explain where it should come from, detail what it would be used for, and apologize for over-extending her fund.
And they can drive the Volvos off the new interchange onto our gravel roads while local governments go pound sand for the eighth straight year. Great plan.
Big spenders in the General Assembly are playing games, however, next year every damn one of them is up for re-election. It is our chance to knock off the Leatherman type RINOS that spend spend spend. Haley is not up for election and I can’t wait for her to hit the road and bust the balls for the BIG SPENDING JOB HATING RINO’s.!
This state needs jobs. Any Senator or Representative voting against jobs but for the wasteful budgets of the Leatherman types can and will be defeated. Their actions are indefensible.
SC needs jobs, not tax hikes and another wasteful budget!
She’ll be running for something, don’t worry.
Taxes aren’t the problem – politicians are.
To get your vote, all they have to do is say they agree with you – idiots.
And you don’;t ever stop to think about accountability…
When you want politicians to agree with you on “social issues” – don’t be surprised when they do things that fuck up “economic issues” – Will, that means abortion and guns.
She won the Governor’s pageant twice! She can do whatever she wants! Do you think she’s stupid enough to care about Math!?!
$120 million and there are “more incentives to come” for a company owner who’s already a billionaire? Ha! Ha! Let the good times roll!
Nikki is hoping that by the time the financial house of cards collapses she’ll have moved on to bigger and better things. Her successors will be stuck with the problem.
Yes. She is skating on very thin ice. It will all come to a head soon, and crack.
Interesting. Let’s see, Obamacare caused SC residents not insured to go to healthcare.gov, where many learned – oh my, they were eligible for Medicaid. So the state’s Medicaid bill went up – by what – I think Wil had an article in the past that it was another $200 million? But because we didn’t expand Medicaid, we eat that $200 million bill. Now had we expanded it, the bill would have been let’s say $400 million, with the Feds covering the cost until 2020 and then the state paying $40 million. If I take $200 million (we have to pay now) and subtract the $40 million we’d have had pay later, assume we paid it today, we’d still be up what – anyone? $160 million in the state budget. So then we could have paid for the Volvo gig without borrowing. Golly, I’m glad we didn’t do that. Much better to borrow money from China for an interchange on I-26 at 3.5% over 10 years, than pay cash today. Makes sense to me. See – that’s Carolina math. Well, South Carolina math.
Fits would rather see everyone living in shacks eating dirt than admit the government spent money on something that worked.
That’s not true, he’s for “cops, courts, & roads.”
Me, I’d prefer people keep their money so they don’t have to eat dirt and live in shacks.
What have the rogues spent/wasted our money on that truly worked and clearly benefited the tax payers of SC – and not the special interest?
He’s completely oblivious to Bastiat’s concept of the “seen & unseen”.
He talks about government “spending money”, but pays no heed to the costs surrounding them taking it from people and already successful businesses to “gamble” on government favored business/industry.
BMW, Boeing, Amazon, Michelin, Giti tires, Bridgestone, Continental
How do you know they’ve “worked”.
Do you have available to you some reliable statistics that somehow discerned the opportunity costs in terms of lost small business that were unable to escape the taxes that the big boys could?
Is that information actually then cross checked against the ACTUAL costs of subsidization of the stated industries to see if the above industries that collectively & directly employ under 50,000 in SC in a population of 4.5 million to see if this tax money taken from small business and other taxpayers actually translated to a higher overall income for them?
Of course you don’t, you’re talking out of your ass. Even further, you scoff at the notion that a thriving small business climate driven by lower across the board taxes might make for a more wealthy environment for the state. Hyperbole is all you have and maybe the occasional skewed SC gov’t report showing all this graft and favoritism is “worth it”.
umm…actually folks is the one making charges without provinding any proof. Like you and the rest of the radical no-nothings that run this state.
No proof anywhere but we keep being told it doesnt work…
Dude, Sonoco alone has a $1b impact on the SC economy. How do I know it worked?
“opportunity costs in terms of lost small business that were unable to escape the taxes that the big boys could?”
Yeah, if SC just cut all income tax like Kansas did, then we’ll be in the clear.
If it’s such a smart move, why didn’t other states jump on that?
Dude, Just becasue SC won out, does not mean other states did not try. NC, GA, to name a few also offered a packages to Volvo and Mercedes-Benz. With our ports, success of other major plants and incentives, SC came out on top
You talk about having proof and talking out of his Ass but that is hypocritical of you since you supplied zero evidence it did not bring huge benefits. Allow me to enlighten you, by reading my post above that clearly provides proof of the benefit BMW and Boeing brought to the state.
Nikki Haley’s biggest problem with Volvo; when all the hotel and motel rooms in Las Vegas are booked full, the back seat just ain’t big enough.
It is typical of FitsNews to bash tax incentives without providing facts. If it were up to you, South Carolina would not have landed the BMW plant or the Boeing plant. So here are some facts about Boeing and the aerospace industry in SC and BMW and the auto industry
South Carolina’s aerospace industry employs 53,000 workers and has a $17.4 billion economic impact on the state.
The aerospace industry is one of the fastest-growing for employment and company growth in the state, especially in the aerospace core.
South Carolina’s aerospace core has had an annual employment growth rate of 11.4% on average since 2010; that is about eight times higher than the employment growth rate for the state over the same period.
The aerospace core’s average annual company growth rate since 2010 is 19.2%, with the majority of growth coming from small firms with five or fewer employees. Boeing South Carolina currently employs 7,500
This growth is not only related to Boeing but ripples out to suppliers, Aerospace suppliers like TIGHitco, Eaton Corp. and UEC Electronics, all in Charleston, supply parts and composites for larger original equipment manufacturers in the state and beyond.
Boeing served as a catalyst for much of the recent growth. The highest regional concentration of aerospace firms and employment is in Charleston,followed by the Lowcountry as a whole, then the Midlands and the Upstate, the study found.
As for the auto industry Pre Mercedes and Volvo announcements ,
It is now clear that BMW has had a potent, enduring effect on the state’s economy. This study evaluates BMW’s contributions to South Carolina’s development at the 20-year milestone. The Spartanburg county campus engenders economic impacts that can be measured in terms of economic output, employment, income, and value added.
BMW’s annual economic output amounts to $16.6 billion. This figure reflects the dollar value representing all output produced in South Carolina that can be attributed (either directly or indirectly) to BMW.
The production of BMW automobiles supports 30,777 jobs in South Carolina.
The BMW plant and associated businesses generate $1.8 billion in labor income that would not exist otherwise in South Carolina.
The total impact of BMW on South Carolina’s value-added (similar to state gross domestic product) amounts to $2.8 billion.
Regional economic impacts can be divided into direct, indirect, and induced effects. The direct impacts reported in this study reflect all South Carolina purchases made by BMW. The indirect impacts express the additional economic activities that result from inter-industry purchases by BMW
and local firms in South Carolina. Finally, the study presents BMW’s induced impact, which calculates the economic activity that stems from increases in spending income by local households.
It is very clear that these two companies have had a major positive impact on SC that will pay dividends for years to come. If folks like Fitsnews had their way, neither of these plants would be in our state and SC would have continue its economic free fall. Thank God we have some leaders with enough foresight and guts to see what the future can hold.