Wouldn’t it be cool if you could Google “Google incentives in South Carolina” and find out the details of the tax breaks Berkeley County gave the tech giant to open a data center there a decade ago? Or how much water Google is buying from the county water department? And at what price?
Unfortunately, you can’t.
Nestled off U.S. Highway 52 is Google's sprawling 500-acre campus. It has themed street names such as Android Aly, the Users Way and Reboot Road. But the company's financial details are far less public.
Worse, Berkeley County won’t provide those details, even though South Carolina’s Freedom of Information Act was written to ensure that we can find out how state and local governments are spending our tax money and conducting business on our behalf.
The Post and Courier’s Thomas Novelly reports that Berkeley County agreed to hide the details about how it’s spending and using public resources behind nondisclosure agreements with Google.
Although payments don’t show up on the county tax rolls, Mr. Novelly did find a county report that said the company that owns Google’s 500-acre campus paid $15 million in taxes in 2018. That’s more than any other company, but it still represents “sizeable bargains for the organization.” The county has so far provided only a heavily redacted copy of the agreement it signed to allow Google to pay a cut-rate fee rather than property taxes; a spokeswoman explained that the property owner “takes the position that their capital investment is confidential and should not be disclosed.”
You know that 50-cent “Emergency Service Preparation” fee on your phone bill? The one the phone company is so careful to point out is a government fee — not part of the company’s charge? Apparently, some phone companies haven't been charging the fee to all of their customers as required by law.
That’s no surprise. What is surprising — or at least disturbing — is that the county allows a business to tell it what tax information it can and cannot release to the public. As we’ve noted before, federal courts in South Carolina refuse to enforce such secrecy agreements involving government, so the county should be willing to let the public in on the secret.
Google purchases most of its water from the Berkeley County Water and Sanitation, which also is hiding behind a nondisclosure agreement that shields the amount and cost of that water. Google isn’t named on the utility’s 2018 year-end report of its top customers; instead, there’s an entry for an “undisclosed customer,” with the usage amount and cost left blank.
It has become increasingly common for governments to lock themselves into agreements that require them to hide what should be public information. The most costly example was the report that told Santee Cooper and SCANA they weren’t doing their jobs in providing oversight of their over-budget, over-deadline construction project at the V.C. Summer nuclear plant. Because it was covered by a secrecy agreement, elected officials didn’t know they needed to force Santee Cooper (and by extension SCE&G) to either get the project under control or get out.
We always knew the S.C. Commerce Department was secretive about the economic incentives it doles out to lure companies to our state, but we didn’t realize how much so until last week, when a state senator went to court to challenge that secrecy.
But Gov. Henry McMaster was able to force Santee Cooper to give him the report because refusing to do so violated state law — something the agreement concerning taxes seems to do as well. S.C. 30-4-40(a)(9) says an incentive agreement that reduces or alters the method of taxation “is not exempt from disclosure after (a) the offer to attract an industry or business to invest or locate in the offeror’s jurisdiction is accepted by the industry or business to whom the offer was made; and (b) the public announcement of the project or finalization of any incentive agreement, whichever occurs later.”
The county’s use of a contract to hide even more information than state law already allows in cases of economic development reflects a disturbing mindset: that there can never be too high a price paid to convince manufacturers — and now, in some cases, even retailers — to do business in our state.
That mindset, pervasive at the state level as well, makes it impossible for us to hold elected and appointed officials accountable when they’re too generous. (It’s telling that Google chose to deal directly with Berkeley County after the state demanded that it create 200 jobs in return for $4 million in tax breaks.) And it makes it difficult if not impossible for lawmakers to tell whether the state’s incentive packages are too generous, not generous enough or just right.
Berkeley’s agreements with Google offer just one more example of why the Legislature needs to prohibit, or at least severely restrict, government from entering into nondisclosure agreements.