Bosch Project Brings $12M-Plus Taxpayer Tab
In 2010, the Robert Bosch automotive parts plant-expansion project in Dorchester County ranked among the top 10 biggest announced job-creation and capital investment projects in the state, according to an S.C. Department of Commerce year-end report.
But what hasn’t been publicized is that the project will carry an estimated taxpayer price tag of about $11.8 million over the next 10 years, Commerce records show.
That works out to be more than $41,000 in taxpayer costs for each of the promised 285 jobs, according to The Nerve’s review of a cost-benefit analysis provided with a state incentives agreement.
And that doesn’t include the millions in property tax dollars that Bosch won’t be paying under a 30-year fee-in-lieu-of-taxes agreement with the county, according to another document included with the agreement.
As Commerce has done with other incentives agreements requested by The Nerve under the S.C. Freedom of Information Act, certain information in the incentives documents for the Bosch project was blacked out.
The redacted information included, for example, the number of jobs and average hourly wage by type of job; and the projected value, by category, of the building, machinery and equipment.
But Commerce redacted even more information in the Bosch agreement – without giving a detailed reason.
The agency blacked out the projected total annual payroll, and the estimated total annual average salary and total average hourly wage for the promised 285 additional employees, leaving taxpayers in the dark about whether their investment will create jobs that pay more than the average wage in the county or the state.
The incentives documents also included one mostly blank page with a handwritten note indicating that “confidential and proprietary information” was being withheld under an exemption in the state Freedom of Information Act.
As has been its practice with The Nerve, Commerce officials did not respond to The Nerve’s written questions about why information was redacted in the Bosch documents. Dorchester County Administrator Jason Ward and Jon Baggett, the county’s economic development director, also did not respond to written or phone messages from The Nerve.
Bosch spokeswoman Becky MacDonald declined comment about her company’s wage scale when contacted recently by The Nerve, saying only, “We don’t make that information publicly available; that’s just our policy within the company.”
Bosch, a global automotive supplier, currently employs about 1,500 workers at its Dorchester County site, which began operations in 1974 and manufacturers a “wide range of diesel, gasoline and chassis products,” according to a Commerce release.
The average annual salary in Dorchester County in 2009 was $30,186, nearly $5,600 less than the average annual statewide salary, according to the most recently available data from the U.S. Bureau of Labor Statistics.
The average annual manufacturing salary in 2009 in the county was $51,267, $4,325 more than the statewide average, BLS records show.
The Bosch project was announced in December by then-Gov. Mark Sanford, Commerce and Dorchester County officials.
This year, officials announced two more industrial projects in Dorchester County: a multimillion, 100-job expansion project at Showa Denko Carbon’s existing plant, which manufactures graphite electrodes; and a $50 million Southeast Renewable Energy plant that would create an expected 20 jobs over five years.
Neither Gov. Nikki Haley nor Commerce or county officials publicly revealed in their announcement whether taxpayer-funded incentives were offered with the latest projects.
For Bosch to receive a $1 million state grant for “upfitting the building and relocating and installing equipment,” the company must invest at least $125 million and created at least 285 full-time jobs by Dec. 2, 2014, according to its incentive agreement.
If it doesn’t hit those targets, it would have to repay a pro-rated portion of the grant based on how close it came to meeting the thresholds, with a minimum repayment of $200,000.
But there are no “clawback,” or penalty provisions for other incentives offered to Bosch. For example, the company is projected to receive more than $8.3 million in job tax and job development credits over the 10-year period, but would not be required to repay any of those earned credits should it not hit its investment or job-creation targets, or fail to maintain the minimum thresholds.
In early 2009, Bosch, citing a downturn in the automotive industry, offered voluntary severance packages to the 1,900 employees at the Dorchester County plant and to 78 workers at its other plant near Anderson; the company announced then it planned to cut its work force by about 10 percent, according to media reports.
The new Bosch workers at the Dorchester County site will receive an estimate $855,000 worth of taxpayer-funded job training, according to the cost-benefit analysis, presumably through the S.C. Technical College System’s “readySC” program, which often provides specialized training for large companies receiving incentives.
The project also would generate approximately $1.6 million in increased state and local education costs over the 10-year period, according to the cost-benefit analysis, which was prepared by the S.C. Coordinating Council for Economic Development, made up of the heads of state economic development agencies, including Commerce, which provides staff support for the group.
The analysis projects an “overall net benefit” of $387 million over the 10-year period, or a benefit-to-cost ratio of 32 to 1, though much of the projected benefit is derived from the estimated total payroll of 522 “indirect” jobs, which aren’t defined.
Over a 15-year period, Bosch would pay an estimated $7.7 million in property fees on the project, according to an analysis prepared by the state Board of Economic Advisors, a division of the S.C. Budget and Control Board.
A company project information sheet included with the state incentives agreement listed Bosch as being offered a 30-year, 4-percent-assessment fee-in-lieu-of-taxes (FILOT) agreement that would rebate 40 percent of those payments for 15 years.
As a comparison, assuming the Bosch expansion property were assessed at the state manufacturing rate of 10.5 percent and a fixed millage rate of 268.4 mills, the company would owe $3.5 million in property taxes for just one year on a $125 million investment.
Reach Brundrett at (803) 254-4411 or firstname.lastname@example.org.