The S.C. Department of Commerce wants to spend nearly half of $150 million in state surplus money it’s seeking for next fiscal year on projects that would benefit corporate giants Boeing and Volvo – contradicting what the agency said in its official budget request, according to an internal document obtained by The Nerve.
Commerce released the two-page document to The Nerve on Friday evening, just several hours after The Nerve reported that the agency was continuing to be secretive about its “Strategic Economic Development Infrastructure” program – even after a request was submitted under the S.C. Freedom of Information Act for all records related to the program.
The Nerve first revealed in December that Commerce was seeking $100 million for the program – its listed No. 1 budget priority for fiscal 2022-23, which begins July 1. Last month, The Nerve reported that Gov. Henry McMaster proposed $150 million for the program, though, as with his Cabinet agency, he gave no specifics in his state budget version about how the money would be spend.
In its initial $100 million budget request and the amended $150 million proposal, both of which were submitted to the state Department of Administration by new Commerce secretary Harry Lightsey, the agency contended the funding was “paramount to the state’s ability to remain competitive,” noting that there currently is “no meaningful way for Commerce to fund an infrastructure need without doing so on a project-by-project basis.”
Constructing or modernizing infrastructure based solely on “population density or individual economic development projects” leaves “significant infrastructure gaps and inhibits the state from responding to business needs in a timely fashion,” according to the public budget request.
Yet the internal Commerce document released to The Nerve on Friday shows that about $70 million of the requested $150 million in funding for next fiscal year would be spent on the following specific projects:
- Relocating and upgrading an existing radar facility at Charleston International Airport in North Charleston to “state-owned property acquired for Boeing expansion,” though the property would “not be available for expansion until approximately 2027.”
- Relocating the existing entrance road to Charleston International Airport to “facilitate future Boeing expansion and ensure safe ingress and egress to and from the airport.”
- Making the Camp Hall Industrial Park in Berkeley County “rail-accessible,” serving “Volvo Cars’ only North American manufacturing facility.”
As for the need for the two Boeing projects, the “aerospace industry will rebound, and when it does, South Carolina must be prepared to remain competitive for Boeing’s growth including the potential to add another aircraft model,” according to the document.
The Camp Hall rail project “complements and will enhance existing infrastructure efforts in the area, while also creating economic opportunity in a predominantly rural area of South Carolina,” according to the document.
The Nerve over the years has reported extensively about the collective hundreds of millions of dollars in taxpayer-backed incentives doled out to Boeing and Volvo.
Friday’s Nerve story pointed out, citing a Commerce email obtained under the Freedom of Information Act, that a draft of the revised $150 million budget request noted there are “several significant infrastructure-related projects from the prior (Commerce) Secretary’s tenure.”
Those projects “account for approximately $70 million of this total request,” and that “increases in construction costs in 2022 and 2023 are expected to increase this amount,” according to the Dec. 6 email from Chris Huffman, Commerce’s chief financial officer.
But the email contained no details on those projects, and a Commerce spokeswoman didn’t immediately respond to The Nerve’s follow-up questions on Thursday after certain agency records were released under the Freedom of Information Act.
According to the internal Commerce document released on Friday, excluding the approximately $70 million for the Boeing and Volvo projects, the remainder of the $150 million in requested funding would be used for “future strategic infrastructure projects.”
An example of a potential project would be “investments in undersea cable fiber like the Google project,” which would “facilitate economic development in areas of the state that would not able to attract investment and jobs absent the strategic economic development infrastructure investment,” the document said.
Google has a data center in Berkeley County. The company’s subsea cables “play a starring role” in helping to improve “global connectivity, supporting users and Google Cloud customers,” according to a Google Cloud blog.
As The Nerve previously reported, the proposed $150 million for the “Strategic Economic Development Infrastructure” program would come from state surplus dollars, budget record show, bringing Commerce’s total fiscal 2022-23 budget to more than $333 million – about $173.5 million more than its current approximately $159.6 million budget.
Commerce this afternoon is expected to present its proposed budget to the state House Ways and Means Economic Development Subcommittee, chaired by Rep. Leon Stavrinakis, D-Charleston. The full House is scheduled to meet in session today at noon; the subcommittee meeting is set to begin 1.5 hours after the full House adjourns.