Tag: Corporate Welfare

WestJet Deal Still Haunts County

A 2013 contract between WestJet Airlines and Horry County Government is still costing the county three years later.

Boiling the deal down to its essence, Horry County Council agreed to guarantee WestJet a 15 percent profit on a new airline route established for the 2013 summer tourist season. The county placed a maximum payout of $1 million on its guarantee.

At the time the deal was struck, we heard pronouncements from members of county council such as it was ‘almost guaranteed that this deal would not cost the county one cent.’

Instead the county owed WestJet $500,873 at the end of 2013 in order to live up to its contractual obligations.

A meeting of the Horry County Administration Committee, held on October 11, 2013, agreed to a payment plan whereby the Myrtle Beach Area Chamber of Commerce would pay WestJet the total amount due and the county would repay the Chamber out of its 5 percent set aside funds from county accommodations tax.

At that time, a balance of approximately $250,000 was in the county’s set aside account. The remainder would be repaid to the Chamber from county set aside accommodations tax funds in the coming years.

The Administration Committee approved a resolution at its meeting Tuesday to allow for continuing repayment of those funds.

The deal with WestJet raises several points about the functions of county government.

This was a bad deal from the beginning. County government has no business guaranteeing a private business a profit that includes the use of any county tax funds, property or otherwise.

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General Assembly Extends Tourism Tax

The SC General Assembly extended the tourism tax enabling legislation allowing for the extension of the tax on local residents and visitors through 2029.

Both the SC House and SC Senate overwhelmingly overrode the veto of Gov. Nikki Haley on House Bill 5011 making the extension of the tourism tax a virtual guarantee.

The very best part of the tax extension, for the business interests that want it, is that once again the tax can be imposed by a supermajority vote of Myrtle Beach City Council and the citizens will have no say in the process.

There is a provision in the bill that allows for a voter referendum on the question of extending the tax, instead of a vote by city council, but that’s merely window dressing. Myrtle Beach City Council doesn’t let those kinds of decisions go to the voters and it doesn’t say no to the Myrtle Beach Area Chamber of Commerce.

The Chamber will be guaranteed hundreds of millions more public tax dollars to use in “out-of-area” marketing. I wonder how much of that is being used in China?

The hotel and golf course owners who control the Chamber board get to keep marketing dollars in their pocket while transferring those expenses to the taxpayer.

And we can hear 10 more years of “Oh yeah, it’s working” ads.

You have to give credit where it is due. This extension was slickly handled and was really never in doubt. So far, there have not even been whispers of how many, if any, sequentially numbered cashier’s checks, from those “like minded” individuals, were needed this time around to get the job done.

We are told free market capitalism is a wonderful thing. Maybe we can even experience it in Myrtle Beach, Horry County and South Carolina someday.

Until then, all those “anti-tax Republicans” we supposedly send to Columbia can continue to forget their campaign promises while continuing to practice crony capitalism and corporate welfare with our tax dollars.

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Nikki Haley and Her Road Plan

We finally know the secret plan of Gov. Nikki Haley to fix the state’s roads.

Haley announced her three-part plan to fix state roads during her State of the State address two nights ago.

The three-part plan is – increase the state gas tax by 10 cents over three years, decrease state income tax rates by 2 percent over 10 years and restructure the Department of Transportation from a legislative appointed agency to a governor appointed agency.

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Accommodations Tax Fuels MB Chamber Greed

When Horry County Council begins in-depth considerations of next year’s budget later this week, the question of how much accommodations tax revenue goes to the Myrtle Beach Area Chamber of Commerce will be a major point of discussion.

While the accommodations tax concept is to help meet the costs of expanded services required by the introduction of millions of visitors to an area, the state law allowing accommodations tax collections requires 30 percent of the revenue generated to be spent on tourism marketing. This provision was one of the trade-offs put in the law to get the buy-in of the tourism lobby.

For a number of years, that 30 percent, approximately $2.3 million from the unincorporated areas of the county, has gone to the Chamber in a block to spend on its marketing efforts.

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More Dirty Tricks

The past two days we have attempted to discover the source of a door hanger, that Grand Strand Daily has labeled “dirty tricks”. The door hanger appears to be a push piece favoring one candidate in the House District 56 race while claiming to be a non-partisan informational message to voters.

That quest continues as we are awaiting information from Freedom Works Southeast Regional Director Allen Page as to who printed and who paid for the door hanger. We were told yesterday that Page had all the information and would be in contact with Grand Strand Daily.

Regardless of the provenance of the door hanger and whether it is in fact a partisan piece, one question addressed on it falls into another area of dirty tricks that is much more egregious, in our opinion.

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Controversial EDC Project Blue on Hold for Now

Public Money, Corporate Welfare

The revelations Monday of a tax fraud conviction and jail sentence for one of the company officials associated with the Myrtle Beach Regional Economic Development Corporation’s Project Blue leads to a conclusion of an apparent shocking lack of due diligence by a number of entities charged with fiscal responsibility for the expenditure of public money.

In many state and local jurisdictions throughout the U.S., conviction of a felony by a corporate officer, especially one associated with tax fraud, would automatically exempt a company from consideration for public money economic development incentives. Such does not appear to be the case in Horry County or South Carolina.

The EDC has put together a deal that would involve approximately $24 million in local and state incentives to Covation, a startup company with no demonstrated performance records.

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