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Consultant outlines state vs. local incentives, urges cost-benefit guidelines
Summary
Mark Farris reviewed how South Carolina and local incentives differ — jobs tax credits, jobs development credits, abatements, multi-county industrial park fee-in-lieu agreements — and urged the committee to adopt standard cost-benefit parameters for future incentive decisions.
Mark Farris, a consultant appearing before the York County Economic Development Committee on March 6, described the mechanics and trade-offs of state and local economic incentives and recommended that the county adopt consistent cost-benefit guidelines.
“[Incentives] are not strategy; they are tactics,” Farris told the committee, emphasizing that incentives should align with a broader economic development strategy rather than serve as the primary recruitment tool. He reviewed commonly used incentives including jobs tax credits, jobs development credits (JDC), abatements, fee-in-lieu of tax arrangements and multi-county industrial park (MCIP) options.
Key takeaways for committee members: - Local fiscal impact differences: Farris presented a county analysis showing that for every $1 of property tax from industrial property the county spends about $0.31 in services, while for owner-occupied residential property the county spends about $1.45 in services. He said those differential service costs help explain why counties often favor industry. - Jobs Development Credits (JDC): Farris said JDCs are state-negotiated credits that typically require board approval; he quoted a typical approval cadence of quarterly Coordinating Council meetings and said credits can be claimed for up to 15 years. He also noted an application fee that has risen to about $5,000. - Fee in lieu / MCIP: Farris explained that an MCIP creates a fee structure (rather than taxes) and can permit the county discretion to redistribute revenues (inside an MCIP the county can allocate revenue differently than a proportional tax abatement outside an MCIP). He contrasted typical South Carolina assessment practice (use-based assessments) with neighboring states’ per-$100 valuation systems and showed how that affects competitiveness. - Abatements: Farris described statutory five-year abatements available under South Carolina law for qualifying operations; those abatements reduce county taxes for the county portion only during the abatement period.
Why it matters: Committee members and staff said the county needs consistent, written guidelines and a framework to evaluate proposed incentive packages and to ensure incentives support targeted industries, workforce goals and long-term fiscal health.
Quotes and clarifications: “We found that for every dollar of property tax that the county receives, we only spend 31¢ in services to an industry or business,” Farris said when describing his cost-to-service analysis. He urged the creation of “established cost benefit ratios” the county could apply to incoming proposals.
Ending: Members asked staff to draft incentive guidelines and a cost-benefit template so Mitch and the economic development office will have a defined operating range when negotiating future incentive packages.
