Former South Carolina tea party favorite Gov. Nikki Haley is at odds with some conservative organizations that previously backed her — groups that say she has failed to decrease the state’s spending and scale back generous business incentives.
“She basically is running all over the state trying to make sweetheart deals with corporations to entice them to move to South Carolina and start business here,” said Harry Kibler, a tea party activist and founder of the conservative group RINO Hunt.
“I have a heartfelt philosophy that if we get government intrusion out of the business culture in South Carolina, that business will move here on its own,” Kibler told The Daily Caller News Foundation.
Since Haley took office in 2011, she has offered at least $70 million in business incentives — “from tax breaks to grants” — according to the Associated Press.
Continental Tire received $31 million in state funds to bring a new tire plant to South Carolina. NK Newlook, a fixture and display case manufacturer, got $200,000 in incentives when it pledged to build a plant in Barnwell County.
“We’re not simply turning over checks to win businesses over,” Haley spokesman Rob Godfrey told TheDC News Foundation. “We consider what is needed on a case-by-case basis and what we focus on is infrastructure, such as in the case of Continental, which recently made one of the largest capital investments in our state’s history and will create thousands of jobs.”
In 2011, South Carolina approved a deal with Amazon.com that proved controversial among the state’s business leaders: After two votes, the state House exempted the online superstore from collecting sales tax for five years in return for promising to create 2,000 jobs and invest $125 million in the Palmetto State.
Brian Flynn, executive director of South Carolina’s Alliance for Main Street Fairness — a group representing small businesses and larger nationwide retailers – said, “They sell the same products and goods that retailers in South Carolina brick-and-mortar stores sell every day, but the brick-and-mortar stores have to collect sales tax at the point of purchase. Amazon is refusing to do that. So we feel that’s unfair and that’s the issue.”
Haley publicly opposed the deal, but said she would not veto it if it passed the legislature, which it did.
“The previous governor already agreed to it, and the state had a signed memorandum of understanding with Amazon,” Haley’s office told TheDC News Foundation. “So while she argued against it, vetoing the bill would have opened South Carolina to legal action, and so she let it become law without her signature.”
In a separate incident, the South Carolina State Department of Health and Environmental Control (DHEC) approved dredging the port of Savannah, Ga. — reversing an earlier decision that had denied Georgia’s ability to do so, basing its authority on the legal status of a shared river needed to access the port.
The Nov. 10 decision, targeted by aggressive and bipartisan opposition, came just after Haley held an Oct. 28 Georgia fundraiser that brought in $15,000 for her campaign.
Conservatives for Truth in Politics released an ad criticizing Haley for cutting a “back room” deal against her state’s interests, forcing South Carolina businesses to compete with Georgians for shipping, and for the money and jobs that come with it.
Haley refused to testify in front of the state Senate on the issue, saying it infringed upon the constitutional separation of powers between the legislature and the governor. She continues to deny that she or her staff played any role in the DHEC decision.
“She played no role in the decision,” Godfrey told TheDC News Foundation. “As we’ve said all along, there’s nothing for South Carolina to fear.”
WIS-TV reported in November that an investigation uncovered a “cozy” relationship between Haley and the DHEC board she appointed. Flight records showed that two DHEC board members gave Haley at least five rides on their private planes between April and October 2011.
Haley received nearly $400,000 in campaign contributions during the second quarter of 2012, with roughly 26 percent coming from businesses interests — nearly half of those from outside South Carolina.
The state’s unemployment rate sits at 9.1 percent, considerably higher than the national rate.
“Putting our people back to work has been the governor’s highest priority and responsibility,” Haley spokesman Rob Godfrey said.
“She’s on the phone with CEOs recruiting businesses to our state almost every day,” he added. “She has fought tooth and nail for tax relief, which she recently signed into law, unemployment benefits reform and a more competitive business climate. Because she knows it’s just as important to take care of the businesses we have here.”
Ashley Landess, president of South Carolina Policy Council, a conservative think tank, has a different take on South Carolina job creation.
Haley “has been more aggressive on making back room corporate welfare deals, and she has been open about it,” Landess told the TheDC News Foundation.
“She has billed herself as the jobs governor,” Landess added. “She has literally gone around the country — she flew to London, she flew to Paris — to go recruit jobs. And that flies in the face in what the majority of people believe any politician should be doing.”
“The governor seems to think that the only people in South Carolina that create jobs is the state legislature and the government,” RINO Hunt’s Kibler countered. “Make South Carolina the freest state or the cheapest state to do business — for all business — and business will naturally be attracted to South Carolina.”
“You won’t have to go out and solicit and make promises and sweetheart deals, offering a new businesses economic incentives that existing businesses in South Carolina do not get,” Kibler added.
When Haley took office in 2011, CNBC ranked South Carolina as only the 37th best state for businesses. It moved up to 32nd place this year, though its ranking fell in terms of “business friendliness,” a measure of how friendly a state’s legal and regulatory framework is to businesses.
This article was updated after publication to reflect that Gov. Haley did not sign her state’s Amazon deal, but also did not use her veto pen. It became law without her signature.
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