Columbia — South Carolina has had a strong run in recent months of enticing several major businesses, and the few thousand jobs that will come with them, to invest within its borders.
But the state does little to monitor the effectiveness of the tax breaks and other incentives used to lure the companies, according to a report released Thursday by the Pew Center on the States.
The report found that South Carolina is among 25 states and Washington, D.C., that may not be spending wisely and getting the most bang for taxpayers’ buck as a consequence of the lack of evidence.
Pew examined documents from state agencies and legislative committees and interviewed policymakers, agency officials and outside experts in compiling the report.
Thirteen states were found to be leading the way in monitoring incentives, including neighboring North Carolina.
South Carolina government agencies didn’t have incentive or tax evaluation documents that met the Pew’s standards for scope or quality.
The governor’s office directed questions about the report to the S.C. Commerce Department, which did not specifically respond to the report in a prepared statement provided Thursday evening, but said it takes incentive oversight seriously.
A spokeswoman for the department said the S.C. Coordinating Council for Economic Development has authority over specific incentives related to grants and job development credits.
Gov. Nikki Haley has made economic development a major emphasis of her administration, and economic incentives have helped the state land splashy additions and expansions during her 15 months in office.
It’s difficult to say just how much U.S. states spend combined on tax incentives, but they have become more common in the past decade, particularly since 2008 when the country sank into recession.
“Given that states are rebuilding their budgets and economies in the wake of the Great Recession, these are mistakes states can’t afford to make,” Pew researcher Jeff Chapman said.
Among the glaring problems identified with incentive oversight was failing to provide information to state lawmakers who have to sign off on the programs, at least initially, Chapman said.
The study found the Palmetto State is among 35 states that didn’t review all major tax incentives or use data to make informed policy choices.