February 21, 2024

The Nerve Archive

Where Government Gets Exposed

Throwback Thursday: Failure to deliver on economic development promises

Tax incentives

State lawmakers have borrowed hundreds of millions of dollars to benefit specific companies — which the state constitution prohibits. Taxpayers are promised the debt will pay off in jobs and investment, but there is little evidence that’s true.

In fact, as the Nerve reported in 2010, many companies that receive incentives shut down completely. 

Lawmakers want to give taxpayer-backed incentives for the Carolina Panthers to build a practice facility in SC – a project they don’t even pretend will create jobs. So what’s the benefit to taxpayers? We don’t know because there is rarely any follow-up. But we do know when companies fail there is no benefit — only a high cost.

Taxpayers need to start asking what they gain when legislators dole out incentives, and demanding full transparency at every stage of every “deal.”

Failed Companies: Money Down the Drain

When Canada-based Western Star Trucks Inc. announced in December 1998 that it would build a $25 million truck assembly plant in North Charleston employing 400 workers, local leaders were giddy with delight.

“I told my wife Deborah there really is a Santa Claus,” Mayor Keith Summey told a local newspaper.

But Western Star Trucks turned out to be more of a Grinch. It closed in December 2000 less than a year after opening, leaving 138 employees out of a job.

And taxpayers likely were left holding the bag.

The company reportedly was offered unspecified corporate income tax credits, job-training assistance and an agreement that would let it pay a greatly reduced fee in lieu of property taxes.

Western Star Trucks isn’t the first company in South Carolina to fail after receiving taxpayer-supported incentives. Other companies that closed or were forced to sell over the past 12 years include:

Continue reading –> 

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