Some Democrats agree that the economic development plan passed by the South Carolina House last week is not all bad. And business leaders should note that much of the proposal’s character came from the pens of the chamber’s minority party.
The package, pushed by Republicans as one of their biggest priorities of the year, eliminates income taxes on corporations.
Democrats criticized what they called “corporate welfare” which they said will give away even more to corporations than the $2 billion which the state already puts on the table for big business.
But Democratic leader Harry Ott was successful in amending the legislation to provide tax credits for small businesses, even though further Democratic-sponsored small business tax breaks failed. And while Ott didn’t completely embrace the legislation he acknowledged that the package increases fees in lieu of taxes and strengthens the Rural Infrastructure Bank.
Orangeburg Democrat Gilda Cobb-Hunter said there were aspects of the bill she really likes such as tax credits for alternative energy.
And she and Horry County Republican Nelson Hardwick co-sponsored amendments to the bill that would recognize agri-business, helping food processing plants. Another bill from the House’s Rural Caucus would encourage, if not mandate, communication between the Department of Commerce and the Department of Agriculture, as Cobb-Hunter said, to elevate agriculture to a level where it can have its own economic opportunities. Cobb-Hunter says her amendments grew out of meetings between the Rural Caucus and the Palmetto Institute, concerning challenges faced by the state’s rural areas.
(Cobb-Hunter on Ag amendments MP3 2:30)
Cobb-Hunter on Ag amendments
Cobb-Hunter says another objective of the rural amendments is to create fertile ground for food processing plants, to serve existing and future farming interests.
And the very outspoken Williamsburg Democrat Ken Kennedy, who previously didn’t like the development plan, said in the end that it had something even for him, and will allow him to expand his small business using tax credits.
But even in her excitement over the rural additions, Cobb-Hunter in the end had to come back to the plan’s component which she’s not very happy about. She says eliminating the corporate income tax reminds her and many of her colleagues of Act 388, another Thursday afternoon tax decision, which Republicans may now look at re-doing. She said a tax problem always comes home to roost.
The tax phase out would begin in two years and continue for a decade. Democrats sponsored the amendment that delays implementation, until a time when they hope that the state’s revenues will begin to climb out of the dark recession hole in which it will find itself over the next two fiscal years.
Republicans say the overall proposal is a way to remain competitive among states hungry to put workers back to work. Four states have already eliminated corporate taxes. One of those states is Washington, which Democrats noted had already lost the Boeing project to South Carolina.