Report: South Carolina among most improved states in financial incentive transparency

(The Center Square) – South Carolina ranked 23rd in the among the 50 U.S. states and the District of Columbia for economic development incentive transparency in nonprofit Good Jobs First’s sixth report card on transparency.

South Carolina was recognized for its improvement in the rankings since 2014, jumping 23 spots for the third-largest improvement. The report noted a state senator sued the South Carolina Commerce Department in 2020, and a judge ruled subsidy recipient data is public information that cannot be withheld.

“An audit done the same year by the Legislative Audit Council found a lack of transparency and poor subsidy oversight by the Department,” the report said. “As a result of those events, the Commerce Department and the Coordinating Council for Economic Development, a board that approves subsidy awards, started disclosing recipient data for grant programs such as the Job Development Credit and the Closing Fund. Tax-based subsidies, however, are still missing recipient-level disclosure.”

South Carolina had a score of 22.8 points, just above the national average of 22.0. The study looked at the top four or five major economic development incentive programs in each state.

Nevada was the most improved, and Kansas was second. Nevada, Connecticut and Illinois ranked atop the transparency rankings. Georgia and Alabama were at the bottom, scoring 0.

“Transparency does not necessarily mean a program is effective or accountable,” said Kasia Tarczynska, senior research analyst and lead author of the study. “But if you cannot even see who got the money and what they said they would do with it, you can’t answer the most basic questions about return on investment or equity.”

South Carolina received zero points for transparency in its investment tax and job tax credits. It received a 20 (out of 100) for its film tax credit transparency, 39 for job development credits and 55 for its closing fund.

The $46 million investment tax credit was a “a one-time, carry-forward, corporate income tax credit equal to 2.5% of a company’s investment in new equipment” in 2022. The job tax credit for job creation was worth $96 million this year.

The state’s motion picture tax credits are worth up to 25% of payroll expenditures and up to 30% of supply costs. The job development credits were worth $96 million. The closing fund was worth $40 million total in 2000 for grants to close deals attracting out-of-state companies or retaining existing major companies.

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