State Panel Approves Incentives after Quick, Secret Meeting; Amounts Not Revealed

April 5, 2013

Investigative Reports

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By RICK BRUNDRETT

 

In the blink of an eye Thursday on a conference call behind closed doors in the S.C. Department of Commerce’s 16th-floor office, up to $8 million in taxpayer-backed incentives were doled out to some of the state’s largest corporations with no members of the public and only The Nerve present.

The money came in the form of port tax credits, which are income tax credits available to manufacturers using South Carolina’s ports whose volume increased by a minimum of 5 percent over the previous calendar year.

State law caps the total amount of annual port tax credits at $8 million. No specific amounts were revealed for any of the projects approved Thursday.

Meeting exclusively by a conference call facilitated by Commerce Director of Grants and Incentives Daniel Young, Coordinating Council for Economic Development (CCED) Enterprise Program Committee members present were Bill Blume, director of the S.C. Department of Revenue; O.L. Thompson, board chairman of the state-owned utility Santee Cooper; Bill Stern, the S.C. State Ports Authority chairman; and Don Tomlin, chairman of the state Jobs-Economic Development Authority.

Once everyone was on the 2 p.m. conference call, a motion was made to approve the minutes of the previous meeting and unanimously accepted. A motion was then made to go into executive session to discuss confidential matters regarding ongoing economic development projects and the parsing out of port tax credits for both income and withholding tax use.

The reporter then left the room and was summoned back approximately 10 minutes later, when all the projects and port credits were passed with unanimous approval.

The Nerve previously has reported about the secrecy surrounding the CCED.

Designed as an economic development tool to entice port activity from existing and potential manufacturers, South Carolina Code 12-6-3375 was enacted in 2005 and allows up to $8 million to be awarded to qualified corporations, not to exceed $1 million each. Sole discretion for the award rests in the hands of the CCED.

On Thursday afternoon, the following corporations’ applications for port income tax credits were approved: Acher Daniels Midland Co. (Kershaw County), Chevron Phillips Chemical Co. (Charleston County), Hengst of North America (Kershaw County), Hubner Manufacturing Corp. (Charleston County), Liquid Combustion Technology (Greenville County), Milliken & Co. (multiple counties), Starbucks Manufacturing Corp. (Calhoun County) and William Barnet & Son (Spartanburg County).

Additionally, the following companies were approved for withholding tax credits (not to exceed $4 million of the total $8 million by law): Daimler Vans Manufacturing (Charleston County), Husqvarna (Orangeburg County) and International Paper Co. (multiple counties).

Similar port tax credits efforts have been implemented elsewhere across the country, most notably in neighboring Georgia. A Jan. 24 report by the Virginia Port Authority calling on its legislature for increased tax credits cited the Georgia and South Carolina programs as harmful to its competitiveness.

“Our biggest port competitor, South Carolina, has an $8 million discretionary fund for use in attracting port-related industry to South Carolina,” the report states. “With a total of $4.925 million available for port incentives yearly, Virginia currently has the lowest per-job incentive available for port-related industry expanding or locating in the state.”

The Virginia Port Authority’s request asks for a grant totaling $5 million a year, not to exceed $500,000 per company, which, if enacted, still would trail South Carolina’s taxpayer-supported generosity.

A request for comment from a Commerce representative about the program was not answered Thursday afternoon, and no Enterprise Program Committee members were made available for comment at the conclusion of the meeting. After every agenda item was approved unanimously, the members voted to adjourn and hung up.

“There is no media or blogger availability at these meetings,” Commerce spokeswoman Amy Love wrote The Nerve in response to a request sent before the meeting. “Nothing on the agenda except approval of the minutes is non-confidential.”

Aiken can be reached at (803) 200-8809 or ron@thenerve.org. Follow him on Twitter @RonAiken. Follow The Nerve on Facebook and on Twitter @thenervesc.