The Palmetto Insider

The blog of the South Carolina Policy Council

White Paper: SC Needs Transparency Reform for Economic Incentives Deals

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With all of the Boeing and Sembler talk, the hottest topic of conversation recently has been economic incentives packages.

Yet there’s actually very little information out there on exactly how much of our tax dollars the government has been doling out to private companies.

Take, for instance, the Boeing deal. Analysis by The Nerve investigative reporter Rick Brundrett found that the Boeing incentives package will cost at least $500 million to create some 3,800 jobs. Yet, notes Brundrett, “The true total cost to taxpayers remains unknown – and may never be known because of state privacy laws.”

But don’t state taxpayers deserve the same level of disclosure that would be afforded to any private investor? – that is, a clear accounting of how much such deals will cost and what the return on investment will be.

According to the Policy Council, the answer is yes. A report issued today argues for greater transparency in the economic incentives game the state has been playing with taxpayer dollars. Here are four specific ideas recommended by the white paper:

1)      Requiring any incentives legislation to be introduced as standalone legislation that receives a recorded vote

2)      Requiring a formal application process for businesses seeking incentives

3)      Requiring a detailed, dynamic cost-benefit analysis of proposed incentive packages

4)      Requiring an annual report that details all economic incentives agreements and their cost to taxpayers

Thus far, the process of granting economic incentives in South Carolina has been akin to handing money to a broker, asking him to invest, and never asking what stocks are purchased and how they are performing.

The Policy Council’s recommendations would foster greater transparency, enabling taxpayers to at least determine whether such economic incentives deals are working as promised. Our guess is that they’re not. But if they are, state leaders should welcome the opportunity to shed additional light on their endeavors to make South Carolina more prosperous.

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Written by SC Policy Council

February 18, 2010 at 3:42 pm

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