December 5, 2022

The Nerve

Where Government Gets Exposed

Governor secretive about $150M ‘infrastructure’ program

By RICK BRUNDRETT

Gov. Henry McMaster wants to more than double the state Department of Commerce’s budget, though neither he nor his Cabinet agency has provided details in official records on a proposed $150 million “infrastructure” program.

McMaster’s requested appropriation for the “Strategic Economic Development Infrastructure” program, which was included in his fiscal 2022-23 state budget version released this week, is $50 million more than what Commerce initially asked for in its budget request presented last fall.

Under McMaster’s plan, the $150 million would come from state surplus dollars, bringing Commerce’s total budget for the fiscal year that starts July 1 to more than $333 million – about $173.5 million more than its current approximately $159.6 million budget.

The Nerve last month first reported that Commerce had not publicly released details on the proposed program. After the agency didn’t respond to initial written questions, The Nerve last month submitted a formal records request under the state Freedom of Information Act, which is still pending.

The Governor’s Office did not respond Wednesday to written questions submitted by The Nerve.

In Commerce’s fiscal 2022-23 budget request, which was submitted by agency head Harry Lightsey to the S.C. Department of Administration, the agency vaguely said $100 million was needed for the proposed program because the state does not have a “funding mechanism to address significant needs that are necessary for the state to continue and capitalize on its economic development success.”

The budget request noted that under the program, grants would be awarded to “bodies of local or state governments or ally groups.”

As The Nerve pointed out last month, though, the request contained no details on the types of proposed infrastructure projects, such as water or sewer lines; what areas of the state would be targeted; or which Commerce officials would be involved in awarding the money.

McMaster’s proposed fiscal 2022-23 state budget also had no details on the program.

Lightsey, who formerly worked for AT&T and General Motors, was appointed in June by McMaster to head Commerce and was quickly confirmed by the Senate, replacing longtime secretary Bobby Hitt. Lightsey makes $252,000 annually, according to the state salary database maintained by the Department of Administration.

A separate state agency, known as the Rural Infrastructure Authority (RIA), already awards tens of millions annually in grants and loans for water, sewer and drainage projects statewide, as The Nerve reported last month. By law, Lightsey, as the Commerce secretary, serves as the RIA board chairman.

In October, McMaster proposed spending $500 million in federal coronavirus-relief funds to improve water, sewer and storm water systems in the state’s rural areas. Under that plan, the RIA would administer those funds.

Besides RIA awards, lawmakers in 2019 approved $65 million to Commerce for the newly created “Rural School District and Economic Development Closing Fund,” which, according to McMaster, who pushed for the state funding, was to be used “solely, and without exception, for economic development” in rural areas.

In addition to the requested $150 million for the still-unexplained “Strategic Economic Development Infrastructure” program, McMaster in his fiscal 2022-23 state budget proposed designating $51 million in state surplus revenues for Commerce’s longstanding “closing fund.”

According to Commerce’s budget request, that fund would be used to increase the number of “new/retained jobs and capital investment to South Carolina,” though no specifics were provided.

McMaster’s proposal for the “closing fund” is $34 million larger than Commerce’s request. As The Nerve previously has revealed, grants from the fund have been used in recent years to lure large corporations to the state by helping them cover building, road, and water and sewer costs.

Money from the account, also known as the “governor’s closing fund” or “deal closing fund,” is awarded by the state Coordinating Council for Economic Development (CCED), an 11-member group made up of the directors or board chairpersons of state agencies, including Commerce, involved in economic development. Under state law, Lightsey is the CCED chairperson.

The CCED over the years has met behind closed doors in Commerce’s headquarters in an office high-rise across from the State House to discuss various taxpayer-backed incentives to companies, as The Nerve previously has revealed.

Brundrett is the news editor of The Nerve (www.thenerve.org). Contact him at 803-254-4411 or rick@thenerve.org. Follow him on Twitter @RickBrundrett. Follow The Nerve on Facebook and Twitter @thenervesc.

Nerve stories are free to reprint and repost with permission by and credit to The Nerve.

 

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