April 25, 2014

SC Senate increases incentives as Boeing looks on

Various media outlets including the Seattle Times are reporting that the South Carolina Department of Commerce is preparing a confidential proposal to Boeing under the code name Project Gemini.

Meanwhile back at the South Carolina Statehouse, the Senate Finance Committee debated a bill Tuesday providing sales tax exemptions for companies creating at least 3,800 jobs which invest $750 million over 7 years, including the sale of economic development bonds. Sales tax exemptions include one aimed at aircraft manufacturers to exempt fuel purchases.

Following Tuesday’s Committee meeting, Finance Chair Hugh Leatherman took the incentives to the Senate floor, where they were approved 44 to 0.

Leatherman said the Palmetto State has attracted a lot of industry over the last decade, but at the same time has not been as competitive as it once was. He said communication with the state’s Secretary of Commerce confirmed that after checking on other states.

The Florence Republican emphasized that the change was only to amend existing law governing incentives.

“What we’re really doing here,” said Leatherman, “is allowing additional tax exemptions to very large projects.”

Richland County Republican John Courson drew a comparison between the amendment and legislation previously pushed by deceased Governor Carroll Campbell, who was famous for his creation of jobs.

“Isn’t this somewhat analogous, even though the instruments aren’t the same, to legislation we passed in the late 1980′s, when Carroll Campbell was preaching this, to allow industries like BMW to locate in the Palmetto State?” asked Courson.

Leatherman responded, “Absolutely Senator.  Without Governor Campbell pushing it and being successful, we would not have BMW in our state today and this is very similar to that.”

The issuance of the bonds will not affect the issuance of capital improvement general obligation bonds used for university construction and similar projects.

Boeing, the largest manufacturer of commercial jetliners and military aircraft, originated near Seattle and still has much of its production there, and there’s no current plan to move it. But what is up for grabs is a new assembly line for its 787 jets, which the company is seriously thinking about locating in North Charleston (or a location near Seattle), thanks to South Carolina’s labor pool and less union-intensive profile.

Boeing is expected to make a decision by early November.