SC House OKs $1.3B Scout Motors incentive deal, conservatives call it a gamble

A $1.3 billion incentive package for Scout Motors got past one road block Monday after the South Carolina House overwhelmingly approved the deal, despite an effort by conservative members to slow down the package.

Scout Motors plans to build a $2 billion electric vehicle plant in Blythewood, which is expected to bring 4,000 jobs to the Midlands.

The 100-14 House vote Monday was the final hurdle for the incentives in the lower chamber after a 96-12 second-reading vote on the package last Thursday. Despite the lopsided approval, members of the conservative Freedom Caucus argued Monday that using taxpayer money for the project was wrong and the government should not pick winners and losers in the economic market.

State Rep. Adam Morgan, R-Greenville, called the deal corporate welfare and a risk that could go wrong. He noted the failure of the Carolina Panthers headquarters deal in York County, which was abandoned last year, even though the state constructed a new Interstate 77 interchange to serve the site.

“This is a gamble,” Morgan said of the Scout incentives, which include hundreds of millions of state tax dollars to pay for road, water, sewer and other infrastructure projects serving the future plant in Blythewood. “The Panthers deal was a gamble that flopped.”

A handful of members objected to the deal, calling Scout parent company Volkswagen a “woke corporation.” Members of the Freedom Caucus have objected to companies pushing environmental, social and corporate governance policies and diversity equity and inclusion initiatives as well.

But the criticism by Freedom Caucus members was a repetition of conservative talking points meant to score political points, said state Rep. Micah Caskey, R-Lexington.

“The only thing they left out was Jewish space lasers,” said Caskey, who supported the package. “They came here today to try to sell you a bunch of bumper stickers.”

Freedom Caucus members objected to the speed at which the deal has moved through the General Assembly. Scout Motors announced it would come to South Carolina on March 3, the same day lawmakers were made aware of the economic development. The Department of Commerce had meetings with both Republican and Democratic caucuses and disclosed details of the incentive package on March 6. House budget writers moved incentive package through committee last week.

The Senate’s Finance Committee also approved the Scout package last week. The full Senate could take up the incentive deal this week.

“I’m hoping the deliberative body across the hall will actually deliberate on this,” said state Rep. Jordan Pace, R-Berkeley, who voted against the package, saying the deal was rushed.

The $1.291 billion state incentive package includes building a railway bridge over Interstate 77 to the Blythewood industrial park site, building a new I-77 interchange to serve the eventual factory, additional road improvements, electrical work, and water and sewer infrastructure.

The company also will be given $400 million for site construction as a part of the $1.3 billion package. Scout will also receive a $200 million loan for additional soil stabilization for the site.

Department of Commerce officials also have included a clawback provision in the deal for up to $790 million if Scout doesn’t meet or maintain certain job and investment commitments, the commerce department said.

Money for the incentives will come from previous state budget surpluses and unspent surplus revenue coming into state coffers this year. This will ensure the state doesn’t have to borrow money for the package.

House members debated the Scout incentives for about two hours Monday, as a part of the overall $13.8 billion state budget being considered for the coming year.

House Majority Leader Davey Hiott, R-Pickens, who voted against the Panthers deal in 2019, defended the package for Scout Motors and the speed at which lawmakers had to move.

“It fell in our lap, and we had to move quickly,” Hiott said, noting that officials from BMW, another major South Carolina auto manufacturer, had encouraged Volkswagen to consider South Carolina for the Scout site.

“I wish it was in Pickens,” he added.