The S.C. senator who is holding up a $115 million tax incentive package for the Carolina Panthers dug his heels in deeper Wednesday, announcing he hired an economist who evaluated the deal and thinks its projected benefit to South Carolina is exaggerated.
In a Wednesday letter to Gov. Henry McMaster, freshman state Sen. Dick Harpootlian, D-Richland, said he will continue to block debate on the Panthers bill until he is satisfied S.C. lawmakers have been provided accurate information about its cost and benefits.
He pointed to the Richmond, Va., City Council’s ill-fated decision to spend public money to entice the Washington Redskins to move their summer training camp to Richmond. When the team’s economic impact proved lower than projected, Richmond lost millions of dollars and had to take out a $10 million loan.
“It is nonetheless a cautionary example of the potential pitfalls for public bodies gifting lucrative incentives to private corporations with little or no recourse should the beneficiary of those incentives fail to uphold its end of the bargain,” Harpootlian wrote.
Harpootlian’s latest move throws another wrench into the effort to entice the Panthers to relocate their headquarters, practice facility and 150 employees across the N.C. border to Rock Hill. It signals a further delay to a package of tax incentives that was expected to quickly pass the General Assembly when McMaster and State House leaders announced the proposal at a March 13 press conference.
Harpootlian said he hired Rebecca Gunnlaugsson, the S.C. Department of Commerce’s former chief economist and now an analyst with a conservative think tank, to review the Commerce Department’s analysis of the Panthers deal. The department found the project’s total economic impact — including state revenue, private economic investment and jobs created — would reach $3.8 billion within 15 years.
In her analysis, Gunnlaugsson estimates the Commerce Department’s projected economic impact is overstated by nearly $2.7 billion, relying on assumptions all 150 Panthers players, coaches, staff and owners will move to South Carolina. Gunnlaugsson said the move actually will create only 208 jobs, instead of the 5,715 promised.
Gunnlaugsson said the Commerce Department estimated that for every one job the Panthers bring to South Carolina, 39.1 more will be created through economic development sparked by the deal — a multiplier she described as “unfathomably high.”
The typical jobs multiplier for “arts, entertainment, and recreation” projects is actually 3.785, Gunnlaugsson wrote.
She added she expects only about 75 Panthers employees to move to South Carolina permanently, half of what the Commerce Department expects.
McMaster, however, is sticking by his Commerce Department’s analysis.
“Fortunately for the South Carolinians who will benefit from the Panthers relocating here, Secretary (Bobby) Hitt and the Department of Commerce have done hundreds of similar economic development deals that have helped bring over 28,000 new jobs and over $8.6 billion in capital investment to South Carolina in just over two years,” McMaster spokesman Brian Symmes wrote in a statement. “Secretary Hitt has met with Senator Harpootlian and other senators, and he and the Department of Commerce will continue to respond to any questions they may have.”
Senate Finance Committee Chairman Hugh Leatherman, another supporter of the deal, defended the Commerce Department on the Senate floor.
“Somebody is looking at the deal, I can tell you that,” the Florence Republican said.
Harpootlian, a former prosecutor and two-time S.C. Democratic Party chairman, said he won’t lift his objection to the bill until he gets better information. He added he doesn’t expect to be swayed when Panthers coaches, players and team mascot — Sir Purr — visit the State House Thursday to build support for the bill.
“I expect Sir Purr will come tomorrow with the answers to all my questions,” Harpootlian told The State sarcastically.
The S.C. House passed the tax-breaks deal late last month after hearing assurances from House Majority Leader Gary Simrill, R-York, that an economic impact analysis by the Commerce Department — typically withheld from the public — showed the benefits would outweigh the costs.
But Harpootlian objected in the Senate, saying he would delay a vote until seeing proof the state is getting a good deal.
The Columbia attorney remains skeptical even after McMaster took the rare step of releasing the Commerce Department’s analysis, which found the deal would generate $188 million in value to South Carolina and a $3.8 billion economic impact to the state over 15 years.
“This is a great deal,” McMaster wrote in his Monday letter to state senators.
Gunnlaugsson is an economist who focuses on public finance and taxation. She holds a doctorate degree in economics from the University of Michigan and is a visiting fellow with the Palmetto Promise Institute, a conservative think tank.
Efforts to reach the Commerce Department for comment Wednesday were not immediately successful.
Harpootlian said he paid Gunnlaugsson personally — not out of his campaign account. But he would not say how much he spent to hire her.