There has been a lot of discussion over the past several months about the $150 million in cost overruns by the SC Department of Commerce to prepare a site for Scout Motors to open a manufacturing campus in Blythewood. This is on top of the $1.3 billion the State of South Carolina has already committed to preparing the Blythewood site for Scout.

Thus far, the legislature has rejected calls from SC Commerce to approve an additional $150 million to cover these cost overruns. But we have learned, this doesn’t mean SC Commerce isn’t doing it anyway.

Despite the legislature not approving the additional funds, we’ve learned SC Commerce has already signed contracts with vendors – obligating the State to pay for the vast majority of the $150 million. Despite the legislature not approving the additional funds, we’ve learned at least $60.6 million of the $150 million has already been spent. You can see the breakdown of this below.

There is a debate happening in Columbia on whether the $150 million should be approved, but SC Commerce has already inked the deals to pay for most of it and has already spent over 40% of it. 

The Federal government does not do many things right. But the Federal government has protections in place to ensure it does not spend funds which have not been appropriated by Congress. In addition to Article I, Section 9, Clause 7 of the U.S. Constitution, which provides “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law”, the Federal government has to comply with a law called the Anti-Deficiency Act. 

The Anti-Deficiency Act at its core, reinforces the Congressional power of the purse enshrined in Article I, Section 9, Clause 7 of the U.S. Constitution, and prohibits the Federal government from spending or obligating funds before they are appropriated, or in excess of the amount appropriated. Seems like common sense, right? Apparently, it is not all that common in Columbia.

While asking the taxpayers of South Carolina to pony up, what will turn out to be $1.45 billion, Scout Motors made a decision which rightly incensed many South Carolinians. The Company had been considering South Carolina, North Carolina, and Virginia for their corporate headquarters – a different facility than the manufacturing plant in Blythewood.

One would think Scout would be grateful for the generous corporate welfare package South Carolina had extended them.  However, just as SC Commerce was seeking the additional $150 million from the legislature, Scout announced they would not be locating their corporate headquarters in South Carolina but instead would be going with North Carolina.

Compare the deal cut by the State of South Carolina for Scout’s manufacturing facility to the deal cut by the State of North Carolina for Scout’s corporate headquarters. 

The State of North Carolina (including county incentives) is offering approximately $71.4 million in subsidies in exchange for the corporate headquarters being located in Charlotte. This will come with 1,200 white-collar jobs, with a minimum average salary of $172,878.

The State of South Carolina is paying what will end up being $1.45 billion in site development (with cost overruns) for at least 4,000 permanent jobs between the factory and supplier park in Blythewood. Most of these will be blue-collar jobs, with minimum average salaries far less than that of the white-collar jobs in their North Carolina corporate headquarters. It is worth noting – South Carolina’s bid to attract Scout’s manufacturing facility was FAR more than any competing state’s offer.

Which seems like a better deal to you?

When we’ve asked Scout why they didn’t choose South Carolina for their corporate headquarters given the significant investment the State has made on their behalf, their response was essentially “well, that wasn’t a part of the deal”.

This is the problem with corporate welfare. No matter how much a State gives to, or spends on behalf of, a corporation – they will never be loyal to you. They care not for the hard work spent earning the taxpayer dollars being spent on their behalf. They care only for their own self-interest.  

South Carolina should attract businesses by being the best place to live and do business – from having the best infrastructure, the least burdensome regulations, and the lowest taxes in the region – not by handing out checks to international corporations who don’t care about us.