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Citizen Reporters: State Caters to Big Business, Ignores Small Business

South Carolina loves to roll out the red carpet for big corporations.

Over the past couple of years, the state has agreed to dole out hundreds of millions of dollars in incentives for big companies. Operations with 100 or fewer employees, though, are often left feeling like men at a baby shower.

“If you’re a small business in South Carolina, you’re not going to get any attention from the state,” said Alberta Wasden, a citizen reporter for The Nerve who also runs an accounting firm in the Lexington County community of Swansea.

“There’s an incentives system for businesses, but it’s all geared toward big businesses,” said Wasden, whose company employs between four and 30 workers, depending on the time of the year. “And it’s amazing when you think about it because the major employer in South Carolina, far and away, is small business.”

Indeed, 97 percent of businesses in South Carolina have fewer than 100 employees, according to Brit Adams of Seneca, another Nerve citizen reporter who operates a marketing business. Companies categorized as small businesses employ nearly 60 percent of the state’s workforce, he added.

“The people who run this state are focused on big business,” Adams said. “But if they really wanted to stimulate the economy, they ought to be focused more on small businesses. There’s so many more small businesses, it could make a huge impact if the state simply tried to spend more time recruiting and assisting small businesses.

“They give all the breaks to big businesses, and nothing to small businesses,” he added.

It’s impossible to determine just how much incentive money the state has handed out over the years to big companies due to an overall lack of transparency and accountability in economic incentives deals.

For example, even though the S.C. General Assembly approved the initial stage of a massive corporate-welfare package for Boeing Co. more than 2.5 years ago – a deal conservatively estimated to be worth $500 million to the aerospace giant – S.C. taxpayers still didn’t know the full details as of last month.

State privacy laws surrounding information filed with the S.C. Department of Revenue mean there’s no way to publicly assess the true costs of incentives deals, or the return on investment for the taxpayers of the state.

A glance at the economic development deals announced on the S.C. Department of Commerce’s website over the past couple of years shows that nearly all the companies highlighted had 100 or more employees. Some, such as Boeing, Bridgestone and Michelin, employ several thousand workers or more around the globe.

Don’t look for that to change, as efforts are underway to further entice big companies to set up shop in South Carolina.

Among legislation under consideration this session is H. 3720, designed to attract large data centers to South Carolina.

The bill, which passed the House last year and is back in the Senate after being amended by both chambers this year, would exempt new and existing data centers from paying state sales taxes on electricity they use and on computer equipment and software they purchase.

It’s geared toward companies such as Google and Facebook.

In addition, the S.C. Department of Commerce – charged with recruiting business to the state – looks to reap a substantial increase in general fund dollars allocated by the Legislature.

Under the budget passed being debated by Senate this week, the agency would see its general fund appropriations jump from $3.9 million to $24.7 million, a 536 percent increase.

Also, both the House and the Senate have proposed boosting the state’s deal-closing fund for next year: $10 million through standard appropriation channels, plus a sizeable portion from the state’s national mortgage fraud settlement.

Charlie Northcutt, owner of Mt. Pleasant-based H.M. Northcutt, a water-management business, told The Nerve he doesn’t see the state’s big-business focus changing anytime soon.

“It’s politics,” said Northcutt, whose 42-year-old company employs nine workers. “Politicians don’t get any points for helping H.M. Northcutt; but they get a lot of attention for helping somebody like Boeing, and that’s their motivation.”

Reach Dietrich at (803) 779-5022 ext. 110, or kevin@thenerve.org.

State Agencies Legislation Incentives General Assembly Economic Development Citizen Reporter Corporate Welfare Accountability Transparency

Small Business S.C. Department of Commerce Bridgestone Boeing Co. Michelin