South Carolina is known for its enormous deals to individual corporations and the way it operates under a thick cloak of secrecy. Boeing, BMW, Continental Tire, Volvo, and the Carolina Panthers have benefited from subsidies that residents will be paying off for decades, even as the amounts have never fully been disclosed.
The state’s most expensive programs are the Job Development Credit (JDC) and the Jobs Tax Credit, which each cost the state almost $100 million every year. South Carolina’s counties also give out large subsidies through Fee in Lieu of Taxes (FILOT) agreements that abate companies’ property taxes for decades. These often trigger layered and complicated schemes like the Special Source Revenue Credit (SSRC) and the Multi-County Industrial Park (MCIP) program, which allow companies to access larger state income tax credits.
The South Carolina Coordinating Council for Economic Development approves awards made through the JDC, the Closing Fund, the Economic Development Set-Aside Fund, and the Rural Infrastructure Fund Activity program, and the South Carolina Department of Commerce manages those awards on the council’s behalf. The Department of Revenue administers tax-based subsidies. County councils approve FILOTs during regular sessions, but usually little information is available before, during and after those public meetings.
In 2019, members of the state General Assembly asked the Legislative Audit Council to evaluate subsidies administered by the Commerce Department. A subsequent report found a lack of transparency and poor subsidy oversight. Consequently, starting in 2020, the Council started reporting recipients, subsidy amounts, job, and investment data for its grants. This was a welcome improvement, but still the public knows very little about which companies receive the subsidies.
The state does not report any programs under the GASB 77 rule. However, a majority of school districts, in contrast to the state’s overall poor subsidy transparency, reported in 2019 revenue loss of $423 million – the highest of any state. The data shows districts with the majority of Black and Brown student populations lose the most revenue. Berkley County Public Schools, for example, lost $54 million in fiscal year 2019, most likely because of massive property tax breaks given to Google.
- See our analysis of GASB 77 data from 2017-2021 on our South Carolina State Fact Sheet.
- See who is responsible for the implementation of GASB 77 on our South Carolina State Road Map.
The Revenue and Fiscal Affairs Office has in the past published general evaluations of subsidies, but South Carolina does not evaluate specific programs on a regular basis. Occasionally, such analyses are requested by the legislators, like the instance mentioned above.