Since reading about Bass Pro Shops coming to North Charleston, I have struggled between two beliefs.
On one hand, my focus these days is in not worrying about what the Bible calls the splinters in other's eyes or perspectives, but instead the log in my own eye. In that regard I am in no way critical of the efforts of North Charleston Mayor Keith Summey, or others, who I am sure have worked hard toward the Bass Pro Shops outcome - after all, they are just using the tool kit that state law provides.
On the other hand, I have a unique perspective on this issue because when I was governor I vetoed the very bill that created the tool that now makes this deal possible. The tool is called "extraordinary retail incentives" - and given the way we were able to impede their use when I was governor, they have never been used before in our state. I believe it would be a mistake to use them now.
I would love for Bass Pro Shops to come here if it did not use these special tax incentives, and again applaud the efforts of the mayor and others. But the unintended consequences of opening this incentive spigot are frightening for all of us as South Carolina taxpayers.
Here are just a few thoughts on why I say this:
The best incentive package in the world for economic development is based not on government inducements, but in the underlying soil conditions for business - things like how the area stacks up on the quality of its workforce or its tax, regulatory, and legal climate relative to other areas. Nevertheless our state has long been committed to using incentives to make the difference in investments that would not have otherwise come our way, like Boeing.
However, retail investment is quite different, as it follows disposable income.
The greater the buying power of a region, the greater the number of retailers who will move there to capture a portion of that area's consumer spending. It's the reason there are lots of shops in Mount Pleasant and very few in Bowman. Using incentives here will shatter a line that has long existed, and move us into incentivizing investments that are already coming our way.
It would actually go further than that, as it moves government into the role of picking one retailer over another. There are a lot of long-established local businesses that have been paying taxes in South Carolina who would now be called on to subsidize establishments that will hurt their sales. Establishments like Dumas and Sons, Carolina Rod & Gun, Haddrell's Point Tackle & Supply, the Charleston Angler, Henry´s Sporting Goods, Atlantic Game and Tackle, and others have long been in the same line of work as Bass Pro Shops.
It will inevitably open Pandora's box in defining extraordinary retail, and will consequently open the floodgates to paying retail, which will result in fewer incentives being available to capture investment from firms like BMW or Boeing. I say this because in politics once the proverbial camel's nose is under the tent, it's hard to prevent those who want your money from getting it. Similarly, limits on how many establishments are permitted to receive these incentives won't last. Shoppers come a long way to go to the Tanger Outlets in North Charleston, just as they do the Bass Pro Shops in Myrtle Beach.
In fact, if you live in the upper part of Hampton County the closest Walmart is down in Beaufort County. My point is an amazing number of retailers will be getting in line to argue why they, too, are "extraordinary."
Finally, there are 170 members of the General Assembly in Columbia, and this moves us to having each act as individual secretaries of Commerce, which undercuts the negotiating ability of the actual secretary.
This law originally came about because an Upstate representative didn't like my secretary of Commerce's reply to a developer friend of his who wanted to bring Cabela's to the Upstate, and as a consequence he crafted this legislation.
If companies believe during economic incentives negotiations that they can just go around the governor's office and instead pass a bill through the Legislature that gives them more than the secretary of Commerce would, expect a lot more of these type bills.
So for these reasons, and many more, I think we would be wise to look before we leap on the Bass Pro Shops incentives package.
Mark Sanford, a Republican, served in the U.S. House from 1995-2001, as S.C. governor from 2003-11, and was elected again to the U.S. House from the 1st District last year.
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