By Steve Hoffman
On July 7, 2015, the Horry County Council approved another 2-year $2.6 million contract with the MBREDC (Myrtle Beach Regional Economic Development Corporation.)
This action is probably very confusing for anyone who has followed the progress of the MBREDC over the years.
Have Horry County taxpayers received a proper return on the $1.3 million given annually to the MBRDC during the past 5 years? Certainly any prudent investor would ask about an expected return on investment before committing funds to a corporation, whether a quasi-public/private or solely private one. There is only one measure of success when it comes to investing your (the taxpayers) money and that is the return on investment. In this case the return would be measured in number of residents who got jobs per tax dollars spent.
Unfortunately (for my peace of mind and confidence in our County Council) I did some basic math. The MBREDC receives $1.3 million annually from Horry County taxpayers. The former MBREDC President Brad Lofton had announced 1,500 jobs were created by the MBREDC in Horry County during his 3 years running the agency. Oops – but it appears that half of those jobs have not been filled. Let’s do some easy math; 750 jobs at $1.3M X 3 years of taxpayer money = $5,200 per job. Oops, forgot to subtract the money owed to the county by the current occupant of the Cool Springs Business Park (paid for by taxpayer $). PTR owes $73,000 in back rent as of June. Is it now logical to add $73,000 / 3 = $24,333 to the cost per job? Well probably not, but you get the drift.
Local government efforts to influence the free market have mostly met with disaster, Think WestJet, AvCraft, Project Blue, and PTR Industries. In an effort to encourage a Canadian Airline, WestJet, the Horry County Council entered into a Revenue Guarantee Agreement. Net result was a $551,000 loss to county taxpayers when WestJet could not fill the minimum number of seats to be profitable. AvCraft was one of the first companies recruited under the reorganized MBRDC banner, but alas filed for bankruptcy this past March. Project Blue, was to be a big government job creator’s dream come true. 1,020 jobs for a call center company, Covation, in the Carolina Forest area. But after years of negotiating and an expected tax payer funded incentive package to Covation amounting to over $1
Million, the project died in December 2012. And we all know the sad story of PTR Industries. Originally expected to provide 100 jobs at the Cool Springs Business Park in Aynor, the company has since fallen on hard times and currently has 48 employees. Besides falling behind on its rent to Horry County, the company owes suppliers an estimated $80,000.
To be fair, the MBREDC has met with some success, primarily the Star Tek call center with 340 employees.
Another reason not to have much faith in local government efforts to create jobs is evident just outside our new Myrtle Beach regional airport. It is known as the Myrtle Beach International Technology and Aerospace Park (ITAP). According to the June 18, 2015 Sun News; “The park has about 400 acres and local officials have spent millions adding utilities, roads and signs to make ITAP ready for businesses to move in. But for three years, the property has remained empty.” OK, let’s repeat the salient points of that sentence….spent millions….has remained empty. And, are you ready for this…..yes, it is to be the next target for MBREDC activities. Our local government has already spent millions on this industrial park (with no results) and of course, if we now spend $X millions more, the world will be a better place….. yeah right! Do you ever wonder when you wake up in the morning, what planet you have landed on?
Thus from my perspective, the $1.3 million per year of taxpayer funds allocated by the Horry County Council to the MBREDC have not created a workers paradise in Horry County. Actually, the reason is simple: Governments do not create jobs, entrepreneurs and consumer demand for goods and services and a process that economists describe as “chaos” is what creates jobs. There are way too many variables to consider in the job creation process and it is beyond any Governmental entity to understand and control these variables.
Again, it is the entrepreneur and the consumer demand for goods and services (otherwise known as the free market) that are the drivers for prosperity (to better understand this process go to this short video “I, Pencil” https://www.youtube.com/watch?v=IYO3tOqDISE ). Government only takes money out of the capital creation process and impedes job creation. This is basic economics and hopefully, the above examples show the folly of MBREDC activities.
But, the Horry County Council continues to throw good money after bad (did I happen to mention that it is your money?). Albert Einstein once said that the definition of insanity is doing the same thing over and over again, and expecting different results.
(Ed. Note – Writer is Steve Hoffman, Murrells Inlet resident who is also the Southeast Regional Director of the Republican Liberty Caucus.)