South Carolina: Boeing, BMW And Corporate Tax Breaks

I have just changed the title of this post to the one listed above.  As I was doing research on the investment made by BMW on their Greenville South Carolina plant I ran across several interesting articles claiming that the people of South Carolina LOST in the deal as the corporate tax breaks which brought BMW into the state has:

• Increased over-crowding in schools
• Increased demand on infrastructure
• Trigged a $40 million run way expansion to accommodate international planes for the benefit of BMW employees

This is the first time that I have ever read that EXPANSION of an area is a negative (except for a wild-life preserve) or other place that the analyst wishes to retain in its primitive state.   I am not so sure that this is absent from the minds of some critics.

• 1999: South Carolina's economy was supposed to improve, but taxes exploded while services crumbled.  
• Do you think that Mr Hancock's argument would stand if the Greenville area's growth were compared to the economic collapse of Detroit or Flint as they lost rather than added auto manufacturing capacity?
• 2002: South Carolina Gets Nod for New BMW Plant–but Nebraska May Have Won 

So again - the argument that corporate tax breaks to win the business for the state coupled with the net increase in taxes on workers as their home values increased and the resulting over-crowding in schools left the local systems with demands that they did not have the funds to respond to.

If we went around to any large "mission accomplished" city where labor and political leadership is in control to the point of comfort by Mr Hancock and Brauer that we would not find the very same constraints - if not worse?

The slight of hand that they try to make is that the arrival of corporations into "Right To Work States" based on the "bad deals for the public" that attracted them have hurt rather than benefited the working people in the area.  In classic "Keep Your Enemies On Trial" neither of these two dare to go to the de-industrializing areas in the Northeast to measure the gross consequences of having lost their economic engines.

Let me now make note of the articles that originally spurred this post.

• 2011 - Boeing's $750M Assembly Plant For 787 Dreamliner Represents State's Largest Single Investment In History - News Of Recent Ribbon Cutting Ceremony 
• 2010 BMW Announces A $1 Billion Expansion Of Its South Carolina Assembly Plant - Will Be Largest Foreign Owned Auto EXPORTE- Destined To China -

I drive through the Greenville area several times a year on I-85 on my way to see relatives.  The amount of growth in this strip since the arrival of the BMW plant and boatloads of people who work at the supplier network is stunning.

I don't mind ideological debates based on one's own valuation of taxes as a means of funding legitimate government services.   When such a person's debate summary is foreign to what is observable in the real world it is time to question their agenda.

In as much as one of the author indicates that SC has one of the worst records on standardized tests - attesting to its poor educational system - I am hard pressed to understand how the successful acquisition of BMW and later Boeing will precipitate this situation.  In addition to the pay checks that are flowing the state can recoup taxes on the network of suppliers that have popped up around the hub companies.  As the time frame of the original agreement with BMW ends they can recalibrate the relationship.    With $1 billion added and additional 1,600 workers the state now has more leverage on the company not less.  They just need to keep the taxation in a range that is below the threshold that will motivate the company to pull up stakes as the capital plant reaches end of life.

I can't agree with the notion that South Carolina is a net loser in this deal.
Michigan, Ohio, Pennsylvania and New York are the losers.  The US Census numbers that documented the migration patterns fortify this point.