Sunday, February 28, 2010

"corporate lobbying & political connections"


Senate Pushes Sembler Corporate Welfare Bill to Early Vote

Today the Senate took action to fast-track legislation giving more than $100 million in taxpayer funded incentives to The Sembler Co., a Florida-based developer, for a planned shopping mall in Jasper County. The Senate voted to place the bill on “Special Order,” which means that the legislation is now in a top priority position to be taken up by the Senate. All bills voted on under Special Order must be recorded votes.

Costs of the incentive package for the new development continue to be unclear: ranging from a low of $22.5 million to as much as $174.5 million in tax breaks over 15 years. If Sembler is anything like the Boeing package legislators approved in October, the cost to taxpayers is probably being underestimated. (HOT LINK: Read here for why future incentives deals should be capped so the costs are known upfront.)

Lawmakers who support the incentive package for Sembler are pushing for the quick vote in spite of vocal opposition to the taxpayer-funded giveaway:
  • The Policy Council and the S.C. Coastal Conservation League issued a joint statement raising economic and environmental concerns.
  • A series of reports in The Nerve (HOT LINK) raised questions about the development, and the developer.
  • The Beaufort County Council (which shares part of the land sited for the project) voted against the deal.
  • An analysis by College of Charleston economist Peter Calcagno projected that the Sembler tax incentives are unlikely to benefit South Carolina’s economy (HOT LINK), or create new jobs.
  • Even the state of South Carolina itself—by way of a report by the state’s chief economist, William Gillespie—concluded that the megamall is unlikely to increase overall sales, but would instead shift sales from existing retailers

A decade of failed experimentation in government-driven economic development, or the fact that taxpayers are being asked to subsidize their competition, ought to be enough to dissuade lawmakers—but the real issue with Sembler is less about economics and more about corporate lobbying and political connections.

February 25, 2010 at 4:55 pm

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