Newspaper: Carolina’s giving Boeing $900 million
Boeing may be investing $750 million to build a new 787 factory in South Carolina, but that cost will be more than off-set by the $900 million or more that state and local governments there have pledged to give the company, a South Carolina newspaper says.
Even more damning, The Post and Courier in Charleston said that most of the people involved in negotiating the deal with Boeing don’t even now how much they gave away. “I’m not sure I’ve ever seen a number that’s been compiled because you have the county involved and the statutory incentives,” Senate Finance Committee Chairman Hugh Leatherman told the paper.
Leatherman and other Carolina legislators approved the corporate giveaways in secret sessions held with Boeing last summer, which were later approved in an open vote during a special session. At the same time, Boeing was noisily demanding contract concessions from District 751. Those talks with the union, it is now clear, were merely a sham that Boeing was using to extract more goodies from South Carolina taxpayers — and as the Post and Courier report shows, it worked.
The newspaper did the math, and calculates that the combination of state and local incentives negotiated last summer and approved in recent weeks will top $900 million, and could be greater:
- The biggest piece is the $270 million the state is borrowing to give Boeing, in the form of bonds. South Carolina taxpayers will have to repay that loan, and with interest, that total will be about $399 million, the Post and Courier calculates. (This is higher than the $315 million we saw reported last week.)
- In addition, Charleston County has approved long-term property-tax breaks worth another $306 million, the newspaper noted. And it has exempted Boeing from having to pay property taxes on the Dreamlifters that are flying 787 in-and-out of Charleston; that’s worth another $100 milion over the next 10 years.
- Of the taxes Boeing will pay on the new Charleston complex, local officials have agreed to give half of that — $50 million — back to the company, in the form of investments in site improvements.
- Boeing will get $47.5 million in corporate income tax credits in return for creating 3,800 jobs. And if Boeing creates more than 3,800 jobs at Charleston, it will get a state tax credit of $12,500 for every additional new job over that target. This would be huge, considering that Boeing only plans to pay its Charleston workers an average of $14 an hour, which works out to about $29,000 a year. That means that for every dollar Boeing spends in Charleston payroll over and above the target, 43 cents of it would be subsidized by South Carolina taxpayers.
In some cases, the tax breaks will extend out 50 years, the newspaper reported.
All this, of course, is still well below the $3.2 billion/20 year aerospace industry tax breaks that the Washington Legislature approved in 2003, in the mistaken belief that Boeing would build all 787s in Everett. However, District 751 members still will be building Dreamliners on two Everett assembly lines long before the Charleston plant is ready to start producing any.
The details about South Carolina’s Boeing give-aways come as the South Carolina Legislature struggles to meet a $563 million budget deficit. To do that, South Carolina’s “Love Gov” — Gov. Mark Sanford — proposes slashing spending for schools, even though the state already has the nation’s third-worst K-12 school system. He also wants to slash colleges and the Medicaid program that most South Carolina residents rely on for basic health services. And state law enforcement officials also are bracing for more cuts, with the state’s top cop warning that he’s already eliminated a third of his officers, leaving the state “at the edge of a cliff” in terms of public safety.
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