How many tax breaks do South Carolina county governments offer to lure businesses into their borders?
There were $221 million in 2016 tax breaks found, according to documents analyzed by The State newspaper – and that amount figures to be a sliver of the overall giveaways in the Palmetto State.
Thanks to a 2015 ruling by the Governmental Accounting Standards Board (GASB 77), state and local governments must disclose their tax abatement agreements. The State collected 2017 disclosures from the 33 out of 46 South Carolina counties that have to date released their financials. And the amount of money disclosed could vary widely, since some regions only listed county tax breaks while others reported a countywide total that could have included tax breaks granted by municipalities, school districts or airports.
Nor does the overall value of $221 million include tax credits granted by the state, which can often bestow incentives that dwarf those given at other levels of government.
The top reason cited for the giveaways: Businesses are trying to avoid South Carolina’s property tax rate on manufacturers – which at 10.5% is the nation’s highest.
Supporters say the tax breaks are necessary to create jobs and diversify local economies. Critics say there is not enough transparency in keeping track of how businesses are keeping their promises of job creation and wage rates in exchange for the tax breaks, and that the tax burden is shifted from newly arrived multibillion-dollar corporations to established, smaller businesses.
In addition, smaller and/or rural counties that offer property tax breaks might not be able to keep up service levels for the influx of new residents that the businesses bring. The State’s article cited how Kershaw County school district property tax revenues fell by $4.2 million under the county’s incentives, and that is straining the school district budget for its 10,500 students – many of whom require special education and medical services. According to the district superintendent, Kershaw’s second-language student population has doubled in the past seven years.
Charleston County Councilman Joseph Qualey is quoted as saying counties need to do more to prove that incentive packages are a legitimate reason why a business is not locating elsewhere. “We need to have accountability to be sure that what was promised … in exchange for those tax incentives actually occurs.”