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Letter to the Editor

EDC Chairman Rainsford defends petition


web posted December 10, 2008
Dear Editor:
In response to your repeated criticisms of the proposal of the Edgefield County Economic Development Committee to amend state law to provide that ad valorum taxes on power generating facilities of utilities be shared by all counties in the state, I would make several points:

First, the notion that any given county “works hard” to get power generating plants built there is an inaccurate assessment of how location decisions are made for these kinds of facilities.  The location of a power generating plant is largely pre-ordained by factors such as the availability of rivers for cooling water, the location of electrical distribution lines, the location of the areas of growing demand for electrical power and other factors generally not in the control of the local governments.  As a general proposition, any recruitment activity on the part of any county economic development team for this kind of facility will have little or no impact on the decision as to where such facilities should be built.  Thus, those very few counties where generating plants will be built have not and will not “earn” the right to have them.

Secondly, in response to your suggestion that it is inappropriate to share tax revenue for industrial facilities in one county with other counties, I would generally agree with you. I would never suggest that we in Edgefield ought to share the tax revenue of the BMW plant in Greenville and Spartanburg Counties or that anyone else ought to share the tax revenue of Urban Outfitters or other plants in Edgefield County.  (We do have provisions in South Carolina for “multi-county industrial parks” but that is another issue.)  In most cases involving the locating of an industrial or manufacturing plant in a county, the local leaders have generally played a major role in inducing these companies to locate within their borders.  Moreover, in most cases, these companies produce products which are sold in markets all over the nation and world and therefore the citizens of South Carolina are not captive customers of those industries.  However, power generating facilities are very different from the normal types of industrial or manufacturing investments in two important ways:

1)    Power generating plants are generally enormous investments involving billions of dollars and dwarfing all other industrial investments in our state’s history.  The case in point is the proposed plant in Fairfield (not Fairfax) County led by South Carolina Electric and Gas Company which is estimated to cost nearly $10 billion.  The fee-in-lieu of tax revenue which this facility is estimated to produce (assuming a 4% assessment and 300 mills) is $120 million annually!  This is such a huge amount that it will be difficult for Fairfield County to spend this much money.  The county’s government and school districts would be able to provide services for its citizens and students beyond their wildest dreams, while the vast majority of other counties continue to struggle just to keep their operations and school systems going. Surely you don’t think that one county should be able to enjoy such a windfall while other counties are unable to make ends meet.

2)    Utilities are regulated industries where, generally speaking, customers have no choice as to whom they purchase from and where rates are set by the state regulatory authority (the South Carolina Public Service Commission) based upon the costs of the utility, including the costs of ad valorum taxes.  Thus, all power consumers from across the utilities’ service area are, in effect, paying the taxes that, under current law, will go to the county in which the generating plant happens to be located.  Surely you don’t think that it is fair for us electrical consumers in Edgefield County to have to pay the people of Fairfield County so much money that they can’t even count it!

It is important to understand that this proposal, if implemented, would have an enormously positive impact on Edgefield County.  Assuming that $25 billion will be invested in power generating plants in South Carolina over the next fifteen years, Edgefield County will stand to get more than $1.7 million in annual tax revenue which, under current law, we would not otherwise receive.  It is hard for me to see how any citizen of this county could oppose this proposal.

Your suggestion that we should get our county’s legislative delegation together and discuss this matter with them and solicit their support is a good one.  We did this several weeks ago.  Senator Shane Massey and Representative Don Smith attended an early morning meeting the Monday before Thanksgiving.  (Representative Bill Clyburn was out of town, but we discussed the matter with him individually and he enthusiastically pledged his support.)  In our meeting both Senator Massey and Representative Smith indicated to us that they thought that this was a good idea and agreed to help us.

At that meeting, both of these legislators discussed the hurdles which would be encountered in the legislature and they gave us their best advice about how to see this proposal implemented.  We specifically discussed the plan to create a lobbying group and to secure funding for this group from Counties and School Districts across the state.  Both of the legislators felt that this sort of effort would be required if we hope to prevail in our efforts.  Thus, we have already pursued the suggestion which you have made.
 
Finally, in your editorial entitled “Does anybody in Edgefield County government have a brain they can spare?” you have criticized me, the Economic Development Committee and the County Council, questioning our effectiveness.  I have clearly acknowledged in the recent County Council meeting and in other forums that I have been frustrated and disappointed at what I perceive as our lack of progress in building our tax base.  Whether we like it or not, we live in a world where the vast majority of industrial and manufacturing investments are not being made in the counties of South Carolina, but in places like Mexico and China. 

While we have succeeded in bringing in what is now the Parkdale Mill, the Federal Prison and Urban Outfitters, our county and school board revenue and jobs from industrial investments has not grown as I would have liked.  I have consistently challenged my fellow members of the Committee and other leaders of the county not to be satisfied with our status quo, but to explore other avenues of improving our County and strengthening our economic base.

All of the members of the Economic Development Committee – approximately ten very dedicated and intelligent county citizens – gather around the table once a month to discuss what is going on and what we can do to bring more investment and jobs to our County.  With the assistance of the Economic Development Partnership of Aiken and Edgefield County and its able director, Fred Humes, we have pursued a number of strategies and continue to do so.

If you have ideas as to how we can be more effective, I would be delighted to hear them.  Thank you for your interest in our county’s progress.

Very truly yours,
Bettis C. Rainsford
Chairman
Edgefield County Economic Development Committee

Editor's note: EdgefieldDaily.com's Editor has published only one opinion on the matter, not "repeated" as denoted in this letter.
 




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