The Palmetto Insider

The blog of the South Carolina Policy Council

SC Delegation Loses to Michigan in $35 Million Bid for Battery Factory

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Politicians spend lots of time and effort playing the economic development game—a process of spending millions of taxpayer dollars to lure businesses to their state and their district. But while the long-term economic benefit of these special interest deals is dubious, the benefit for politicians is clearly about headlines. But for the South Carolina delegation’s much anticipated bid to lure Toda America to South Carolina—not so much.

Senator Lindsey Graham and Representatives Henry Brown and Joe Wilson all pushed for federal dollars in a bid to bring a Toda factory to Goose Creek. But the Post & Courier reports today that the lithium-ion battery manufacturer is taking the $35 million federal grant—which was apparently to bring 60 jobs and $70 million dollars in investments to Berkeley County—to Michigan instead.

Jobs are good, and bringing manufacturers to South Carolina is good. But in the bright light of economic reality, spending millions of taxpayer dollars—state or federal—inevitably buys few jobs today compared to the tax bill we all have to pay in the future.

South Carolina’s growing addiction to special interest economic incentives has failed, but that hasn’t stopped our politicians from playing the game. The lure of political power and superficial publicity is far stronger, and easier, than meaningful reform of our state’s tax code. But that’s what it will take to make South Carolina a healthy environment for all businesses, big and small alike, and attractive to new businesses—either home grown or newcomers to the state.

Case in point: The next big economic development scheme you’ll be reading about is what’s being called an “extraordinary retail establishment” — i.e., a shopping mall — in Jasper County. The Atlanta-based developer who owns the property is lobbying South Carolina lawmakers for $100 million in tax breaks to pay for the development.

You’ll get your bill in the mail come April 15.

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Written by SC Policy Council

January 5, 2010 at 2:33 pm

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