Opinion: Putting tax dollars to work in S.C.

Opinion: Putting tax dollars to work in S.C.

The State
April 29, 2008

By Frank Knapp

In a guest column on March 13, Commerce Secretary Joe Taylor said his agency had modified the state’s film industry incentives in order to “encourage the hiring of South Carolinians and the purchasing of products from South Carolina businesses.”

The S.C. Small Business Chamber of Commerce believes that this concern for using our tax dollars to encourage the procurement of goods, labor and services from within the state should apply not only to the film industry incentives, but also to all purchasing by the state of South Carolina.

In 2003, the Small Business Chamber obtained information from the S.C. Comptroller General’s Office that showed that 42 percent of our state’s procurement dollars were going outside our borders. In 2003, that was about $1.3 billion.

It was clear that if more of our state procurement dollars remained in South Carolina to purchase goods, labor and services for the needs of state government, our small businesses and workers would benefit and our state’s economy would grow.

The following year our organization began proposing changes to our state procurement code that would have the net effect of more procurement dollars remaining in the state. But as simple a goal as this seems, crafting legislation that would result in practical and user-friendly procurement code changes that would also garner legislative support was not an easy task. Consequently, these early efforts were not successful.

Finally in 2006, with instructions from the Senate and House leadership, the Budget and Control Board began working with us to develop procurement code legislation that would achieve our goal. As a result of those efforts and the important support and leadership of Lexington County Sen. Nikki Setzler and Rep. Mac Toole, significant economic development legislation is now close to being passed this year.

This legislation would make strategic changes to our procurement code. The current in-state vendor preference would remain, and our in-state vendors would always retain the advantage in the bidding process with all things equal.

However, often there is no in-state vendor competing for a state contract, and the out-of-state vendors have no incentive to use S.C. workers or products under the present procurement code.

This legislation would allow out-of-state businesses competing for contracts to also earn some in-state vendor preference by using S.C. goods, labor and services for significant percentages of their proposed contracts.

In this way, we will be telling all those who wish to do business with our state that not only will they need to give us the best price, but they also will need to secure goods, labor and services from our businesses and workers. All contractors, regardless of where in the world they are located, will be incented to keep as much of our procurement dollars as possible in South Carolina.

The controversy over the state film industry incentives involved how to best leverage $8 million to $9 million to benefit our state economy. The procurement code legislation now moving through the General Assembly has the potential of leveraging billions in state procurement dollars to benefit our businesses and workers.

Mr. Knapp is the President and CEO of the South Carolina Small Business Chamber of Commerce.