Government Competing with Private Sector Is Bad Economic Policy

July 24, 2003

Columbia, SC — The SC Small Business Chamber of Commerce is again focusing attention on government’s relationship with in-state small businesses. Earlier this month, the 9,000 member organization released information showing that the state spent $1.3 billion a year with out-of-state businesses and called for change to spend more state dollars with in-state businesses.

The Small Business Chamber is now also weighing in on the issue of public bodies competing for business with the private sector. Specifically, the Chamber is opposing the University of South Carolina’s desire for an on-campus hotel.

“The University of South Carolina, like all state agencies, is an asset to our local economy,” said Frank Knapp, Jr., executive director of the Small Business Chamber. “But when it or any state agency starts competing with our local small businesses, our economy suffers. It is absolutely unfair for a taxpayer-supported agency to take market share away from the very small business entrepreneurs and their employees who are paying those taxes.”

“Sometimes government entities forget that their mission is to provide services that the private sector cannot do on its own or that the government can do better,” said Knapp. “Neither of these applies to USC having its own hotel. Columbia has plenty of hotels to accommodate USC guests and more privately owned hotels are planned for the area. Transportation via our new RTA system and private sector taxis are also readily available.”

“When government starts competing with the private sector, every small business should be concerned,” warned Knapp. “Today it is USC’s 117-room hotel. Tomorrow it will be an expansion of the number of rooms and the addition of a restaurant and gift shop to accommodate the anticipated growth Dr. Sorensen sees. This is not an isolated incident. Just las week, privately owned employment companies were complaining about competition from the SC Employment Security Commission. For the good of our small businesses and our economy, this trend must stop.”


Contact: Frank Knapp Jr. @ (803) 252-5733 or (803)600-6874 cell

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