State oversight authority approves roughly $300M in housing incentives
By Nick Reynolds (nreynolds@postandcourier.com) | The Post and Courier | December 21, 2021
COLUMBIA — After several months of delays, South Carolina’s fiscal oversight board approved roughly $300 million in tax incentives for affordable housing projects under a new, controversial program that could cost the state significantly in the coming decades if allowed to continue.
The incentives, approved Dec. 21 by a 3-2 vote of the State Fiscal Accountability Authority, will help fund nearly two dozen projects throughout South Carolina, mostly in cities including Columbia, Charleston, Spartanburg and Greenville.
The two voting against the incentives described them as giveaways to wealthy, mostly out-of-state developers.
“It’s really hard to tolerate what’s being done to the citizens and taxpayers of South Carolina,” said Comptroller General Richard Eckstrom, the state’s chief accountant.
The developers benefiting from the program are the “richest, whitest people on the planet,” said Treasurer Curtis Loftis, noting only a few of the participating firms are local. “They come here to take their multimillion dollar checks back home. … They don’t owe us a duty of anything.”
Gov. Henry McMaster, as well as the House and Senate’s chief budget writers, voted in favor, despite their own concerns.
The rules shouldn’t be changed for projects already in the works, said House Ways and Means Chairman Murrell Smith. But the Sumter Republican made clear he will work in the upcoming session to narrow the program going forward.
“We set up the rules and we were wrong,” Smith said. “But it’s not fair for people to invest into this program and to play by the rules that the state set up and then change them at the last minute.”
The tax incentives are the first approved under the state’s Workforce and Senior Affordable Housing Act, a first-of-its-kind tax incentive program the Legislature created last year to spur much-needed affordable housing development across South Carolina.
About one-third of South Carolina families struggle to afford housing, according to a 2019 study by the state agency that finances the projects. According to the National Low Income Housing Coalition, the state has just 44 affordable homes for every 100 low-income South Carolinians.
The program was more popular than expected, attracting hundreds of applications and far exceeding the anticipated number of credits lawmakers thought they were agreeing to when passing the bill.
If left as is, the program could collectively reduce taxes into state coffers by $5.16 billion over the next two decades, according to an Oct. 27 memo from Frank Rainwater, executive director of the S.C. Revenue and Fiscal Affairs Office, which predicts tax revenues.
Members of the five-member oversight board, including Smith, blamed the state Housing Authority, accusing the agency of providing legislators inaccurate information. Housing officials have said in the past they’re trying to provide the necessary data and come up with potential solutions.
After Tuesday’s meeting, the group rejected assertions by state officials they had intentionally led lawmakers.
“SC Housing was not tasked with creating a fiscal impact statement during two legislative sessions that the bill creating the state tax credit was being considered by the General Assembly,” Chris Winston, an SC Housing spokesman, wrote in a statement to the Post and Courier. “SC Housing provided all data and information requested by those responsible for creating and providing fiscal impact statements to lawmakers. And throughout the year, SC Housing has continued to provide data and information to the members of the SFAA.”