June 5, 2023

The Nerve

Where Government Gets Exposed

Panel Approves Another $100 Million for Boeing

The NerveA legislative panel this morning gave another $100 million taxpayer-funded gift to the Boeing Co., bringing the total state bond package for a new assembly plant in North Charleston to at least $270 million.

In two unanimous votes, eight members of the S.C. Joint Bond Review Committee authorized the sale of up to $100 million in general obligation bonds – which taxpayers will have to repay with interest – for the project.

Lawmakers had not previously revealed that bond amount to the public. It is in addition to $170 million in economic development bonds that the General Assembly unanimously authorized for Boeing in a special session Oct. 28.

In a special investigative series launched on Monday, The Nerve revealed that the Boeing incentives package would cost state taxpayers at least tens of millions of dollars more – and possibly several hundred million more – than what lawmakers have said publicly since rushing through the deal in October.

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” inSouth 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.

And certain lawmakers appear eager to keep handing out taxpayer-funded goodies for economic development projects, despite having to fill an estimated $560 million hole in next fiscal year’s general fund budget.

“We may be back asking the General Assembly to do a similar-type thing to help attract companies and provide jobs to our people,” Senate Finance Committee Chairman Hugh Leatherman, R-Florence, who also heads the Joint Bond Review Committee, said during this morning’s meeting.

Leatherman noted that he has a “project or two” in mind, and that House Ways and Means Committee Chairman Dan Cooper, R-Anderson, a committee member, has another project. But neither lawmaker gave any specifics during the meeting.

Reach Brundrett at (803) 779-5022, ext. 106, or rick@scpolicycouncil.com.

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The Nerve