The Palmetto Insider

The blog of the South Carolina Policy Council

Southwest Airlines Announces Service to South Carolina

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In case you have been asleep at the computer today and missed it, Southwest Airlines announced plans to open service to Greenville and Charleston in 2011.

The dates are left uncertain, but the press release from the company was quite clear on one thing:

No government subsidies are needed to make this decision.

The airline included this disclaimer in the opening sentence of its release – likely in response to the controversy surrounding a proposed $15 million subsidy for the airline industry under consideration by the legislature.

It is great to see that a new business is relocating to South Carolina. Private investment = more jobs = more wealth.

But what is even more promising is Southwest’s candor that it’s coming to South Carolina because it makes good business sense – not because of a political handout.

Typically, this should not be a newsworthy event. But in light of the Boeing deal, and the attention that Sembler has received – economic subsidies are a hot topic these days. Of course, as we predicted, Boeing would have come to South Carolina even without the almost-$1 billion in incentives it is receiving.

Still, legislators refuse to believe that lowering taxes and reducing regulatory burdens are better public policy than handing out targeted tax breaks. So, Midlands legislators raised a fight last week in the legislature about incentives being given to Greenville/Charleston – and not their airport in Columbia.

That battle raises the point – government should not be involved in paying off businesses to locate to one location versus another.

The fact that Southwest has chosen to expand into South Carolina will hopefully dispel the notion that the government must give out incentives to businesses in order to attract new firms. This has been the modus operandi of the legislature in recent years — evidenced by the growth in economic incentives spending from $32 million in 1994 to more than $500 million in 2008.

With luck, the legislature will take notice of the message Southwest has heard – people don’t want to see their tax dollars being used to pick winners and losers in the market.

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Written by Geoff Pallay

May 11, 2010 at 3:48 pm

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