How Much Does the Machine Really Cost?

WHAT IS THAT THING, AND WHY ARE WE PAYING SO MUCH FOR IT?

Read Quantifying the Machine, the Policy Council’s report on the costs of economic development, here. For other material on state-driven economic development, click here.

In the report, we reveal that state government now spends hundreds of millions of dollars on “economic development” each budget year – to no discernible effect. In 2009, state lawmakers appropriated $311 million on various economic development agencies, programs, and initiatives.

  • In one year, the Department of Parks, Recreation, and Tourism received over $23 million for tourism marketing – taxpayer dollars given to market one favored industry.
  • The Department of Commerce maintains a “deal closing fund” ranging from $7 million to $25 million annually. The fund uses taxpayer dollars to entice private companies to expand or relocate.
  • About half of the state’s spending on economic development consists of “workforce training”: that is, training workers for the benefit of private companies instead of allowing those companies to pay for their own worker training.

Despite spending vast and ever-increasing amounts on economic development, South Carolina is where it has been for more than a generation: ranked near the bottom of the nation in employment (6th worst), median income (8th worst), and poverty (9th worst).

“We spend more than $300 million a year to ‘create jobs.’ Yet, other than government press releases, there’s no proof that it’s actually working,” says SCPC President Ashley Landess. “Taxpayers are spending more and more on high-paid government jobs, but those exist primarily to promote government, not genuine private-sector growth.  If this economic development machine is delivering clearly measurable benefits to all taxpayers, then politicians need to prove it.  Otherwise, they have an obligation to dismantle this massively expensive failure and give the money back to the real job-creators: South Carolina business-owners, workers and consumers.”

                                              –Policy Council President Ashley Landess

 

 

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