House JBRC Members Urge Governor to Pay Cash for Volvo
June 8, 2015
House members say use new cash rather than debt
COLUMBIA, SC – The Joint Bond Review Committee, made up of five Senators and five members of the House of Representatives, unanimously authorized the Department of Commerce’s request for $123 million in economic development bonding to pay for the recruitment of Volvo Car Corporation to South Carolina. The vote came after Commerce Secretary Bobby Hitt stated that he needed the authorization to fulfill the state’s contractual obligation to the automobile company. The committee questioned the wisdom of the proposed borrowing scheme that would have severely stretched a $50 million debt capacity and cost the state millions of dollars in additional interest costs.
House Ways and Means Chairman Brian White (District 6-Anderson) and the other members of JBRC, released the following statements:
“We should use cash to fund the infrastructure portion of the Volvo project rather than engage in a risky borrowing scheme that wastes millions of taxpayer dollars. While we approved the authorization of the bonds today to keep our commitments, I call on Governor Haley to support the House Ways and Means Committee’s decision yesterday to use $70 million in available cash so that only a portion of the project would need to be borrowed. This is the only responsible way to manage taxpayer dollars and keep our debt load at manageable levels,” stated Chairman White.
Rep. Gilda Cobb-Hunter (District 66-Orangeburg) stated:
“It is always better for taxpayers to pay as you go. The JBRC actions today ensure that policy will be in effect for this major project.”
Rep. Chip Limehouse (District 110-Charleston) added:
“The Ways and Means plan to pay cash for Volvo is the fiscally prudent course of action and we should not bond the project when we have cash on hand. The interest savings alone by paying cash will be in the tens of millions of dollars and I hope the governor and the Department of Commerce will see the wisdom of the House’s plan and urge the General Assembly to back it so we can get this deal done and move on to the next big South Carolina economic development success.”
Rep. Kenny Bingham (District 89-Lexington) had this to say:
“The JBRC’s action today ensures that there will be no delay in the completion of the deal with Volvo. While it was reasonable that Commerce fashioned a plan based on the information available to them at the time and today we made the prudent decision, this is a two-part process so moving forward, the General Assembly must determine the most responsible way to fund its commitments. The economic development bonds are tapped out and by paying down debt and by avoiding $70 million in borrowing, we free up capacity for the future.”
New JBRC member Rep. Murrell Smith (District 67-Sumter) stated:
“Today we met our commitments to Volvo. Now it is the time for the governor and the General Assembly to get together and appropriate the new money certified by the BEA rather than borrow the entire amount, which would prevent us from leveraging economic development bonds for future projects.”
