Action Alert--SBDC budget vetoed

Yesterday Governor Haley vetoed the entire state budget for the South Carolina Small Business Development Center. Please see the letter below for our reasons for asking the Legislature to override Veto # 12.

Call your House and Senate member ASAP, before noon today, and ask them to vote t override Veto # 12. You can find a list of all House members here and all Senators here.

Please take this action immediately.

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June 29, 2011

South Carolina General Assembly
State House

Re: Veto 12, Small Business Development Center

Dear Legislator:

Governor Haley, like Governor Sanford before her, has vetoed the entire state budget of the South Carolina Small Business Development Center (SBDC). We are asking you to vote to override Veto 12 as you and Representative Nikki Haley did last year. The reasons for your override vote have not changed since last year because the incorrect reasons for the veto are the same.

Governor’s Reason #1: This program is not central to the university’s (USC) mission.

The federal government requires that its one-to-one matching funds for the nation’s SBDCs go through an institution of higher learning. USC provides this administrative function for its partner institutions of Clemson, Winthrop, and SC State. The approximately $1.4 million federal dollars the state receives is added to the state, local government and some private funds to operate SBDC offices in Aiken, Beaufort, Charleston, Clemson, Columbia, Florence, Greenville, Greenwood, Hilton head, Myrtle Beach, Newberry, Orangeburg, Rock Hill, Spartanburg and Sumter. Every one of these offices will close if the Governor’s veto is not overridden. Local governments and private businesses will not continue to fund a program the state has abandoned.

Governor’s Reason # 2: This program duplicates services already offered by the South Carolina Department of Commerce and the U.S. Small Business Administration (SBA).

Neither the S.C. Department of Commerce nor the SBA provides one-on-one consulting services to small business owners trying to grow their businesses or simply trying to survive in this economy. The S.C. Department of Commerce only lists three small business functions of its website: providing information on educational resources, providing information on financial resources and its small business ombudsman’s office (which refers small business owner to the SBDC). The SBA lists Small Business Development Centers as a provider of SBA’s consulting services. Therefore the SBDC is not a duplicative service of the SBA because the SBA relies on the services of the SBDC.

In her letter, Governor Haley indicates that her vetoes will help us “move forward in strengthening our economy”. Her veto 12 does the opposite. It will seriously damage our economy that depends on our small businesses.

Sincerely,

Frank Knapp, Jr.
President & CEO
The South Carolina Small Business Chamber of Commerce

Amazon will build in Lexington Co. without tax deal or we'll see them in court

It’s not often in a political debate that a key argument of one side gets exposed as a complete fraud. This is one of those rare times.

From the beginning of the Amazon.com controversy it was almost universally accepted that giving the company an exemption from collecting sales tax from in-state sales was a bad deal for all our other small retailers that compete with the online giant. And trying to help the economy of one county at the expense of small businesses across the state is simply not fair.

As one state Senator told me, “Frank, you’re probably right about everything but we made a promise that we have to honor.” For the opponents of the Amazon.com deal this has been the hardest objection to overcome even though we always believed that the only promise made was to try to get the tax deal approved by the Legislature. I, and probably most of you, had not seen the tangible evidence of our suspicion until now.

On December 23, 2010, the South Carolina Department of Commerce (DOC) and the South Carolina Coordination Council for Economic Development entered into an Incentive and Inducement Agreement with Amazon.com. Here is article 3.1.3 of that agreement.

3.1.3 Nexus Safe harbor Legislation. Section 12-6-60 of the Code of laws of South Carolina, 1976, as amended (the “SC. Code”), provided that owning or utilizing a distribution facility (as defined therein) within the State would not be considered in determining whether the company has nexus with the State for income tax, corporate license fee or sales tax purposes. However, this provision was repealed for tax years beginning after June 9, 2010. Subject to available resources and to the extent permitted by law, DOC agrees to use its good faith, best efforts to obtain legislation to renew and extend the nexus safe harbor provision.

The State of South Carolina did not “promise” to give Amazon.com the sales tax deal. (Read Cindi Scoppe’s editorial in today’s The State.)

In the competitive world of business recruitment, the contract is everything. If the promise is not on paper and signed, it doesn’t exist. Amazon.com knows that. Commerce knows that. The Senate (which has seen this Agreement) knows that. The House knows that. And most importantly the courts know that.

South Carolina has and will deliver everything we actually promised Amazon.com including the Department of Commerce’s “good faith, best efforts” to secure the sales tax deal. But when the Legislature does the right thing by turning down this request, Amazon.com will still build the distribution center in Lexington County….because that’s what they promised.