June 5, 2023

The Nerve

Where Government Gets Exposed

Senator to Push Next Year for New State Agency

The NerveA state senator says he’ll try again next year to get a bill passed creating a new state agency aimed at bringing businesses to poor counties along Interstate 95.

Sen. John Matthews, D-Orangeburg, told The Nerve last week that he didn’t have “adequate time to work with the House” on his bill (S. 1323), which would have created the “I-95 Corridor Authority.”

“Once we have more of a chance to sit down with the leadership of the House and try to explain what we’re doing, I think it will be better,” he said.

The bill was introduced on March 25 and passed the Senate on April 30, but remained stuck in the House Ways and Means Committee as the legislative session ended. On top of that, the House two weeks ago sustained a veto by Gov. Mark Sanford of a budget proviso (89.143) that would have funneled $3 million in tobacco settlement money to another state-created agency, known as the S.C. Research Authority, to “promote health-related issues” along the I-95 corridor.

Under Matthews’ bill, the proposed corridor authority could hire the SCRA to help with “technology-based economic development.” The SCRA, created by the General Assembly in 1983, was identified two years ago as a key player in House Speaker Bobby Harrell’s “knowledge-based economy” pyramid plan.

“As real as the economic, health or educational challenges might be on the I-95 corridor, there are areas of equal challenge in other parts of South Carolina,” Sanford wrote in vetoing the budget proviso. “More significantly, we do not believe this is the year to begin a new program in health care when the current budget and next year’s budget do not contemplate enough in the way of financial resources to fund current programs and existing needs.”

Matthews told The Nerve last week that Sanford is misinformed on the issues affecting the 17 counties that the proposed corridor authority would oversee.

“Unless we get some state entity to take on the issues affecting the I-95 corridor, we’re going to further slide into poverty and bring down the rest of the state,” he said.

Matthews and other supporters of the bill say the proposed corridor authority is needed to provide an economic jump-start to a large area of the state that historically has suffered from high poverty and unemployment.

But critics contend the proposed authority would create yet another level of unnecessary bureaucracy in state government and siphon tax dollars away from core government functions to benefit specific businesses – better known as corporate welfare.

The purpose of the authority, according to Matthews’ bill, would be to “carry out economic development and educational improvement activities, which, in the opinion of the authority, will improve the economic conditions in its member counties.”

Under the bill, taxpayers could be forced to fund incentives to businesses that locate in the corridor. The proposed authority, for example, could receive state funds “as appropriated by the General Assembly,” according to the bill.

The proposed authority, described in the bill as a “public body, politic and corporate, and an agency of the state,” also could lease, buy and sell land; and enter into contracts with individuals, businesses and private “entities” that are “considered desirable in the furtherance of (the authority’s) purpose.”

Matthews earlier told The Nerve that to his knowledge, the proposed corridor authority would have no counterpart in South Carolina or the United States. But less than a week after Matthews’ bill was introduced, state Sen. Harvey Peeler, R-Cherokee, proposed creating a similar state agency, to be called the “I-85 Corridor Authority,” though Peeler told The Nerve that his bill (S. 1339), which didn’t pass this year, dealt mainly with widening a stretch of Interstate 85 in the Upstate, and would not provide taxpayer-funded incentives to businesses locating there.

Under Matthews’ bill, the I-95 Corridor Authority would be controlled by 13 voting members of a 19-member board of directors, the majority of whom would be appointed by lawmakers in the affected counties. The board, according to the bill, would “appoint officers, agents, employees and consultants; prescribe their duties; and fix their compensation.”

The bill was co-sponsored by seven other senators whose districts are located partially or entirely in the corridor. They included Sens. Hugh Leatherman, R-Florence, and John Land, D-Clarendon, who proposed the budget proviso to direct the $3 million in tobacco settlement money to the SCRA.

The House stripped out the proviso in its final budget version, but a six-member budget conference committee that included Leatherman and Land put it back in the Legislature’s ratified spending plan.

Matthews’ bill mandated that the proposed authority “oversee the implementation of the recommendations” of the “I-95 Corridor Human Needs Assessment” report, prepared by a North Carolina-based research company and published in December.

That report identifies 17 counties in the corridor: Bamberg, Beaufort, Calhoun, Colleton, Clarendon, Darlington, Dillon, Dorchester, Florence, Hampton, Jasper, Lee, Marion, Marlboro, Orangeburg, Sumter and Williamsburg.

The report, prepared by RTI International, headquartered in Research Triangle Park, identifies six “fundamental needs in the region,” including “creating a shared vision for the region’s economic opportunities, and aligning resources with that vision will allow decision makers to leverage greater state and national resources for investment in the corridor.”

Citing 2005 U.S. Census figures, the report noted that of the 17 counties, only Beaufort and Dorchester had median household incomes above the then-state median household income of $39,477; and that seven out of eight of South Carolina’s poorest counties were located along the I-95 stretch.

“The I-95 Corridor Authority is a new approach to solving an old problem,” Matthews told The Nerve last week. “Certainly, doing nothing is not an option.”

Reach Brundrett at (803) 254-4411 or at rick@scpolicycouncil.com.

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The Nerve