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Guest Column: ‘Groundhog Day’ For Small Businesses In South Carolina

Mom and Pop Alliance: “Lowering taxes across the board and enacting meaningful tort reform would help bring new businesses and prosperity to the Palmetto State.”

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by DIANE HARDY

When South Carolina establishment VIPs devised a secret plan for a $1.3 billion incentive package (click here and here for details) to be awarded to Volkswagen/Scout – and then pushed it very quietly through the legislature at lightning speed last March – we at the Mom and Pop Alliance believe they probably assumed citizens wouldn’t take much notice. After all, these establishment VIPs are used to giving large incentive packages of taxpayer money to big businesses without much scrutiny. But this time we are NOTICING and QUESTIONING, because this one is different:

  • This one is for manufacturing electric vehicles (EVs), a hallmark of Biden’s green agenda.
  • This one was for a foreign company (VW) that not only has a net worth of 39 billion dollars but also has a history of committing fraud.
  • This one was made during the new era of ESGs (social credit scores placed on big corporation designed to trickle down to small businesses).
  • This one follows in the footsteps of the now bankrupt Proterra EV bus package.
  • And this package was for more than ONE BILLION DOLLARS!

It’s hard for most of us to comprehend what a billion dollars really represents. It is 1,000 million.  Spending $1,000 a day, it would take you 2,740 YEARS to spend a billion dollars.  A billion one-dollar bills laid end-to-end measures over 96,000 miles and would extend around the earth almost four times. Mind boggling! So surely if we’re talking about this amount of money, our elected officials would want citizen buy-in and would be very prudent and deliberative, right?

Well, in our state government, we paradoxically saw just the opposite. 

Despite the conservative talking points you may hear, those of us who have tried to get any significant legislation through the S.C. General Assembly have quickly learned why our state has a reputation for having one of the most liberal Republican legislatures in the nation. Every legislative session, we see good bills blocked in committees, or on occasion, trivial bills passed and then touted as great reforms. It just feels like Groundhog Day year after year. Getting meaningful legislation passed is rare and usually requires a herculean effort. Just look at the nine years and thousands of man-hours from many groups and concerned citizens it took to repeal our state’s outdated Certificate of Need (CON) law as an example.  

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These facts make the passage of this $1.3 billion package (part cash, part incentives) through the SC House AND Senate in less than two weeks all-the-more exasperating for those of us in the trenches trying to provide a voice for small businesses in our State House. It is ridiculous that citizens and legislators alike were given no time to read, discuss, debate, or fully understand the deal, and the pressure placed on them for their ‘aye’ votes was immense. Only a handful of senators and state representatives withstood this pressure and voted NO. They deserve our gratitude.

Now that some of the details are coming out as to how this deal came about – including a very extravagant dinner event held at Williams Brice Stadium (complete with non-disclosure agreements) – it’s no great surprise that several representatives and senators who voted in favor of the deal have privately informed the Mom and Pop Alliance that they now regret their votes. Undoubtedly, they were manipulated and pressured. Our organization will redouble its efforts to highlight that what small businesses really want, among other things, is protection from over-regulation, frivolous lawsuits, and ESG mandates, and to be able to keep more of their hard-earned money.    

We at the Mom and Pop Alliance of SC (www.momandpopalliance.org) are entering our third legislative session of working to get strong legislation to protect SC businesses from the devastating impacts of ESG social credit scoring. Similarly, pursuit of much-needed tort reform has also been ongoing for multiple sessions now. Meanwhile, Florida has already accomplished both and so much more, including real school choice, as well as laws offering Floridians protections from ESGs, the World Health Organization treaty, and federally backed digital currency. South Carolinians are wondering why we can’t have these protections, and have been surprised to learn that our governor decided NOT to join the 19 states (AL, AK, AR, FL, GA, ID, IA, MS, MO, MT, NE, NH, ND, OK, SD, TN, UT, WV and WY) who have signed on to a multi-state alliance to reject ESGs.

We must all remember that these “deals” (many of which have not worked out as planned in the past) come at a cost – a cost paid by ordinary citizens and small business owners. Since state government doesn’t create money, it is our money that is being awarded to these foreign businesses. We are told by those in favor of corporate hand-outs, “Don’t worry. This deal will create jobs, and if it doesn’t there are claw-backs.” But time and again we have not seen the diligent follow-through needed to enforce these claw-backs, or we have seen a continuous lowering of the bar as was the case with Proterra as it was heading into bankruptcy. We are also told, “Don’t worry. We won’t let VW/Scout ‘do ESG in our state.’” The Mom and Pop Alliance believes this is impossible and would respectfully ask, “Exactly HOW are you going to do that?” We wonder how many of the legislators who voted YES for this “incentive package” knew that the EU passed a law on Dec. 30, 2022, making ESG-reporting mandatory for all European corporations AND their subsidiaries, even if located in the US.  

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Finally, we have been told much of the money is going to infrastructure (which “is a good thing, so the money isn’t being wasted”), but is this the infrastructure citizens want? Time and again citizens and small business owners have said the infrastructure they want is for our roads to be fixed! Are they even sure this is what the local citizens of Blythewood (where the plant is going) want? It’s interesting that the incumbent mayor of Blythewood recently lost his seat, receiving only 30 percent of the vote. Were the citizens demonstrating their dismay over this deal by ousting their mayor? Who knows for sure, but the Alliance has heard that many of the locals and business owners are not happy with the loss of trees and the increase in traffic congestion this project is already creating for them, and they worry that these EVs (that are years away from being rolled out) may not be the success story that our governor and the VIPs who devised this deal envisioned.  

Another argument we have heard is that South Carolina incentivized BMW in 1992 and that worked out great for our state. They don’t mention the many economic development failures since then which have left SC taxpayers holding the bag, or the fact that BMW was making a product with a proven history and sales demand, unlike a start-up product like a Scout Motors EV. Neither do they acknowledge that much has changed since then, which was decades before we had to worry about the social credit scoring of ESGs and their impact on both our businesses and our culture. Also, the money/incentives awarded in that deal was a fraction of the $1.3 billion package we just awarded to Volkswagen. South Carolina’s reputation nationally of being a VERY pro-economic development state comes naturally, given the legacy of Nikki Haley and the fact that our current governor was a past co-chair of the Economic Development Task Force at the National Governor’s Association. Perhaps it’s time to have a discussion regarding the effects on taxpayers and free markets when our government continues to pick winners and losers. 

We at the Mom and Pop Alliance of SC believe that for way too long, large corporations and special interests have had a very big seat at the table in Columbia, exerting strong influence on our state’s policymakers. Given these realities, it sometimes feels to us like we are walking into a David vs Goliath situation, but we will continue our efforts of giving a voice to small businesses and to push for meaningful ESG protections, tort reform, and promoting a more substantial lowering of our state’s income tax rate.  The 2024 session of the S.C. General Assembly begins Tuesday, January 9, 2024. We would love to see this cycle of never-ending Groundhog Days broken once and for all. Perhaps looking to Florida for the roadmap of how to do so would be helpful. It is indisputable that lowering taxes across the board and enacting meaningful tort reform would help bring new businesses and prosperity to the Palmetto State. We also think, given the details surrounding the VW/Scout deal, that a robust debate around the issue of economic development in our state is needed. These past few years have been especially hard on family-owned businesses. We believe it is well past time for some balance in our state and giving them an actual seat at the table would be a great start. Please consider joining us in our mission to provide that much needed voice in Columbia for the Palmetto State’s 430,000+ small businesses by signing up at www.momandpopalliance.org.

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ABOUT THE AUTHOR …

Diane Hardy is a former nurse anesthetist turned entrepreneur, who opened a franchise at Verdae in Greenville over seven years ago. She is executive director of the Mom and Pop Alliance of SC, which she founded during Covid upon discovering South Carolina’s almost 400,000 small businesses had little representation in our State House. The Alliance provides education, communication, and advocacy for SC’s family-owned businesses. Her passion for South Carolina’s small business is strong, and as such she donates her time to the organization, accepting no salary or government funding.  Her love for our state isn’t new.  Before launching the Mom and Pop Alliance she was the founder and host of The Palmetto Panel (2014-2019), an annual statewide conference highlighting issues impacting South Carolina.  Diane has a bachelor’s degree in nursing and psychology from Michigan State as well as a master’s degree from MUSC.

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3 comments

CongareeCatfish Top fan January 4, 2024 at 10:28 am

Good piece. I would love to see some scrappy investigative journalist do a deep dive on companies that were given publicly funded incentive packages like this, and find out how many of them actually produced the number of jobs required to receive the package, and if they did not, if the State ever actually pulled the trigger on any of those clawback procedures. I would also love to see an academic researcher, maybe someone seeking their PhD in economics or MBA at Darla Moore, do a economic study to find out if these state funded incentive packages, on a macro level, produced a significant net positive result for the state’s economy – it seems like it did with BMW and Boeing, but the jury is out on many others. Also, the author’s warning about EVs is quite warranted: Ford and GM have been losing their shirt thus far in the EV market, despite billions in public subsidies – the public is just not buying these things in the numbers needed to make them financially viable. The batteries on these cars are so expensive that consumers balk when they hear what it might cost them to replace them; this is a major part of why EVs perform poorly in the used car market. They also add so much weight to the vehicle in comparison to a gas powered car that there are instances of older parking garages collapsing or structurally failing. Bottom line, we don’t need any more black- eye debacles on huge state- backed industry expansion or construction projects like the SCANA/Santee Cooper Monticello nuclear plant expansion – which still stands as the largest failed construction project in the entire history of the United States.

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Ralph Hightower Top fan January 4, 2024 at 1:46 pm

There are many foreign companies located in South Carolina. BMW was given many incentives to locate in South Carolina. Michelin, Volvo, SmithGlaxoKline, Daimler, Honda (outdoor equipment).

School choice in South Carolina should be based on means; if a family can afford to send their kids to private school, then they don’t need tuition, or a subsidy. There are no private schools in Allendale County; that was the county that South Carolina took over for a few years. The closest ones are in Hampton County and Bamberg County.

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Frank January 4, 2024 at 6:24 pm

You must think mom and pop small business owners are stupid? Because you treat them that way. The Republican Party runs this state and giant corporations run the Republican Party. That has never been more true than since they sold their soul to a grifter billionaire, who supports whoever gives him the most money. Just this week, we discovered that his businesses received almost 10 billion dollars from the Chinese and Saudis while he was president. That does not include the patents his daughter received from China, the 2 billion his son-in-law received from the Saudis, and all the money from other countries. Republicans exist to funnel money to big business in exchange for bri..er contributions.

If small businesses want help they need to look to the other party or just continue to be screwed over and over by Republicans supported by people like you and Trump, who are just in this for the money.

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