STATE SHOULDN’T RAISE TAXES WITH MULTI-BILLION DOLLAR ASSETS ON THE BOOKS
Dear Editor:
It seems unbelievable that South Carolina should be struggling to come up with enough money to pay for road repairs; federally mandated educational improvements, and many other critical needs when the Palmetto State has one of the largest cash assets in the United States.
I’m referring to Santee Cooper, our entirely SC-owned power utility.
Santee Cooper is a fantastic state asset. It is the third largest government-owned power utility in America, following Bonneville Power and TVA (both of which are owned by the federal government).
How much is Santee Cooper worth? Back in the 1980s, when I worked for SCANA Corporation, I did a study for SCE&G’s Chairman, Virgil Summer. The study was to determine how much Santee Cooper was worth, and how much we should offer to buy it.
That number was approximately, $2.5 billion dollars.
How much is Santee Cooper worth today? According to its 2014 Annual Report it has approximately: $11.2 billion in various assets, income of $1.5+ billion/year, and an A+ credit rating. Debts and other liabilities could probably be extinguished in a sale – thus making Santee Cooper worth well over $10+ billion dollars.
Another way South Carolina could partially cash out is by taking Santee Cooper public. Our state could possibly obtain as much as $7 to $8 billion and still own the controlling 51 percent of the stock – the value of which would continue to grow over time. The timing is perfect, as investors are desperate for new, solid A+ investments.
What would the sale of Santee Cooper cost our state? Basically, nothing. SCE&G and Duke Power’s rates are about the same as Santee Cooper’s – meaning ratepayers would see little difference. Meanwhile local Co-Ops under existing contracts would still get their power from Santee Cooper as usual. Job losses at the utility would be minimal, as it runs a very tight operation.
What other benefits are there to South Carolina? As the title of this column suggests, lawmakers would not need to borrow any money, raise gas taxes or property taxes to repair the roads, or meet the lost federal lawsuit requirements along the I-95 “Corridor of shame.” If our state invested the money it would return much more to the State Treasury than the approximate $20 million dollars Santee Cooper annually pays today.
There would be billions of dollars leftover for the state’s reserve fund – and the utility’s new owners would pay taxes, which Santee Cooper does not pay in the counties it serves. In fact this is one of the big reasons Santee Cooper’s coverage areas have poor schools. They are deprived of the taxes on physical plants that SCE&G and Duke Power pay out to each county. In fact: SCE&G and Duke are among the largest taxpayers in the Palmetto State – even though their rates are among the lowest in the USA. For example: SCE&G paid Lexington County alone $33 million in 2014. That’s $13 million more that Santee paid for its operations in the entire state. Thus, a sale would guarantee future tax revenues for all the counties it serves while relieving the rest of the state’s taxpayers from having to meet the federally mandated differences.
In summary: South Carolina gets billions of dollars, doesn’t have to sell bonds or raise taxes, poor counties get much needed tax money, rates stay about the same, and our government could still own the controlling 51 percent of the company. It sounds like a no brainer to anyone with common sense.
But, as Virgil Summer warned me years ago getting our state to sell Santee Cooper is a political land mine. It has lobbyists (paid for by taxpayers) working Columbia 24/7/365, and has convinced the public that nothing needs to change. The entire legislature is petrified to even investigate a sale, much less propose one be undertaken.
South Carolina shouldn’t sell bonds or raises your personal property taxes – or raise gas taxes – while at the same time owning vast cash assets. It’s like taking out a second mortgage on your house for repairs when you have a stash of gold in a bank vault. It makes no sense. For the benefit of all South Carolina citizens we need to either sell Santee Cooper, or take it public.
William A. Byrd, Senior P.E., C.S.
President, PrivaCom Ventures, Inc.
Columbia, S.C.
SIC SEZ
William: Great column. This website has been supportive of selling Santee Cooper for years. Thanks for offering these insightful views within the context of the gas tax debate.
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88 comments
First!!!!!
LMAO!!!
LMAO!!!!!
:)
You think Santee Cooper is bad? Wait until you see the new SCE&G rates released today, which just went up 2.78%. ORS & Dukes Scott look out for the consumer like Todd Rutherford looks out for the Board of the Palmetto Family Council.
Don’t you see someone stands to make big bucks by ripping people off, and all that needs to happen is the state selling it off to the right crony capitalist for a huge discount!
IPO Auction.
Only 49% though.
No discounts here. A public auction will create a bidding war.
It will be one of the biggest public offerings or sales in years.
There will be large International bidders or investors.
Mmmmm … except for Google. How did that work out for stockholders and g’ment? The Arabs and Chinese bought in low and sold out high, but world wide sales were there too and most of those stockholders have held on = :>}))) … and all Wall Street got was commissions (poor babies).
Santee’s rates go up too.
Except Santee Cooper isn’t regulated by the state like SCANA or Duke are because it’s state-owned, not investor owned. Also, you’re right about Santee Cooper’s rates, but they haven’t gone up as much as SCE&G because Santee Cooper isn’t building nuclear reactors.
Uh, yes they are…
A good chunk of ’em, anyway.
Most respectfully disagree.
Santee Cooper owns half of VC Summer #1 and good amounts of VC Summer #2 & #3 now under construction.
This brings up an interesting point. SCE&G gets discounted money for its joint Nuke construction by partnering with Santee Cooper. That gives SCE&G access to Federal Loan money at lower rates.
Just one more reason to study this idea completely. The Legislature needs to take a serious look at both sides. Not just ignore a possible sale or public offering.
Santee Cooper owns 1/3 of Unit 1, and 40% of Units 2 & 3.
Good catch, but originally I believe it was 50% VC Summer #1 and for #2 & #3. Santee Cooper’s parts were negotiated down later.
You can disagree all you want, champ, but you’re still wrong. It’s a fact that Santee Cooper is a state organization. Its employee salaries are public records, they are controlled by state law, and they are owned by the state of SC instead of investors. Santee’s residential schedule rates are about 10 cents/kWh and SCE&G is almost 15 cents/kWH.
And if you think the legislature is going to get anywhere near this, you’re living in a dream world. They appoint the ORS director who is supposed to regulate the IOU’s (i.e. Duke, SCE&G, etc). But that’s pretty difficult when you open your eyes to the fact that SCE&G and Duke basically fund the campaigns of the legislators, the legislators have Duke Scott hire their relatives, and the director of the electric and gas division at ORS is living off of a SCE&G pension as well as a high six-figure state salary.
It doesn’t matter if Santee Cooper is footing 49% or .5% of the VC Summer projects. SCANA owns more than half and they call the shots. Their rates reflect that, and consumers do not have a choice where they get their power. Get your head out of your ass.
REALLY!!
Obviously, you like the world the way it is, not what it could be.
I don’t need you to school me on how the Legislature and Utilities operate. I could write a book on it and one day I might do just that.
Selling Santee Cooper or taking it public is exactly what needs to be done. Especially, if you want to change things in this State.
Of course, you could just pay the 20 cents/gallon gas tax being proposed. Plus, the massive new property taxes you are going to have to pay to meet the Federal Courts Education Lawsuit requirements.
And, as you say, Keep your head up your A……….: CHAMP!
Yep… look for it in the near future.. IMO.
SCE&G needs this rate increase to make more money so they can “invest” and “create Jobs.”
Great Idea. Should be worth a few billion dollars. And lets sell the SC State Ports, too. For some strange reason, it answers to NOBODY.
What do we sell next year when we’re out of money again? The statehouse? Some parks maybe?
Yes. Lease-back works where the state must pay something close to a fair market price for all of that useless office space. (Out here in Taxifornia, the state is the biggest landlord by far … Which explains why the vacancy rates are greater than 60% on downtown L.A. Office buildings. The fools even leave the lights on 24/7.)
Who will have control of lake levels and the right to build docks? Does the Corps of Engineers have any say on Santee-Cooper lakes?
This would still be controlled by the Corp of Engineers, no matter who owns Santee Cooper. Nothing would change.
Actually, according to this FOX News reporting…Published May 27, 2015.
The Obama administration has issued new rules directing the EPA and army Corps of Engineers to take control over streams, waterways, wetlands, and even ditches and puddles in the name of protecting the environment.
http://www.foxnews.com/politics/2015/05/27/epa-issues-final-rules-protecting-drinking-water-streams/
Yeah… Even the mud puddles.
Good point. I’m not sure this is a good idea. As it just introduces another layer of red tape to permits. But, considering how they just allowed massive numbers of private marsh long docks to ruin the river fronts and boat access along the coast; something needs to be done.
The Corp of Engineers must have been looking the other way when they handed out 1000s of unrestricted dock permits around Charleston.
I see this as another way to the tax the little people. We just give it a different name… “permit”
~get real
FERC has the final say
Duh! The Corps Always retains control, no matter which way the wind blows.
Duh! That’s not always the case.
Remember: This is South Carolina. Could Santee Cooper be sold in a transparent transaction at the true market value? I suspect it would be sold as a “sweetheart” deal to benefit cronies of political figures in Columbia.
This is always something to look out for in SC.
It would have to be a very open and public disclosure deal.
But, it’s $10 billion dollars!!!!!!
That’s a lot of money we don’t have to pay out of our taxes.
Too true. The Wall Street sharks would swarm the deal. The Dutch Auction is the best way to offer the stock in the market place.
If by “sweet heart” you mean that the private sector owners would stand to make a profit, well then the deal will never happen to anyone’s satisfaction without that … I know I would never invest in a company that did not have a good chance of making a profit.
If you mean a crony capitalism deal, well, maybe, maybe not. Again I would not be interested in investing in a fixed game, either. Too much whinnying, too much grief, lower profits in the long run.
Let’s sell the Statehouse and pimp out Haley while we’re at. If you don’t want to pay your fair share of taxes , you should resign yourself to living in a shithole…
I truly like the suggestion in your first sentence. That might seriously help with some of our problems. As for not paying taxes, I don’t know about you, but these assholes take quite enough money from me under threat of armed forces as it is. As Tom Davis is correctly advocating, they need to learn how to use that money properly and in an above-board manner.
Ever lived in New England? The taxes are high, public transportation is readily accessible, they have excellent schools ,along with cheap lobster, and you won’t need to put your car in the shop over a few miles of bad roads.
The downside is the cold weather. It’s worth going, esp in the summer. Get a Connecticut lobster roll instead of the Maine version.
I would highly recommend , Lobster Landing.
$83 / h0ur @mk26
,,
—-http://IncentiveMilesSite.net/hoty/job/life…
“Let’s sell the Statehouse and pimp out Haley while we’re at.”
You’re halfway there!
I would love to run the Governor’s Mansion like a brothel! We could have politicians, strippers and cake! Let them eat cake!
Seems very short sighted to sell off such an asset lock, stock and barrel for a one time road repair project. I can see taking it public and have The State of South Carolina remain in control of the company by holding 51%+ of the company. With proceeds from sale of the minority interest being used to fund needed deferred highway maintenance.
When dividends are paid take the money from the 51% that is state owned and invest that in to a highway maintenance fund so that we can stay out of the trap in the future. Lots of way to manipulate the stock to grow money once it’s publicly traded. That seems to be the most stable and best plan for SC in my humble opinion.
Use the IPO process to sell the stock in the company, no crony backroom deals.
Says one greedhead taxsucker …
Good idea..
Selling state owned assets is always good. Your state government should not be in competition with private enterprise.
But selling off a part or less than 49% is never going to work. If the state benefits from annual profits to a greater extent than private shareholders, then the state gets all of the “tax breaks”, and the shareholder AND ratepayers will get the shaft. All or nothing, fully privatized or forget about it.
SC would get the full benefits of private property and income taxes, tithes and tributes, if sold off entirely. A partial sale, even 50 or 75%, is still not going to work out. Conflicts of interest being just one of many questions.
Excellent post.Thank you for breaking this down for us.
Go find a well and drown in it, Pogo.
+1000000000000
I guess what you are saying works in Taxifornia, but here we’d rather keep our 51% under state control and “cook the books” to our advantage. I’m sure we can find investors.
Oh contrar’ … Joint public/private ownership absolutely does not work in Taxifornia, never has, never will.
“Cooking the books to “our” advantage?” … Whose side are you on exactly? The taxpayers’ or the taxsuckers’?
Thanks Eddy, I agree with you. This is the main reason to sell Santee Cooper.
The article stated some interesting numbers about how much the state would profit from the sale, but unless I missed it the article didn’t say how much the state loses in annual income from no longer owning Santee Cooper. Like winning the lottery, you can either take the full cash payment up front or annual payments for many years…..most winners blow through their one time payment and would have been better served receiving annual payments over time. I fear our lawmakers would just waste the windfall in the short term and then a few years later we are left with no asset and no annual income had the state kept ownership……..just mentioning as a consideration of why continuing to own might be a reasonable idea.
This is a quote from fitsnews responding to the release SC March employment data.
Fitsnews response on the SC April employment data released 10:00 am Wednesday:
????? silence ?????
I plane add one Factoid about SC employment to each consecutive article fits publishes.
Factoid 1
Fits is confused.
Laborforce is not equal to Workforce. Laborforce includes the unemployed actively seeking work. Workforce only includes people with jobs. Since Haley entered office the Laborforce has increased by 95,668 and the Workforce has increased every single month. Total gains equals 173,960. The difference in the two numbers is 78292, which is the reduction in unemployment.
Also note a fact about all these so called: “Good Jobs,” coming to SC.
They are almost no full time jobs included: they are nearly all TEMPORARY JOBS.
Designed to screw the workers out of health care, and benefits they deserve. Most States have told these companies to keep looking.
These jobs amount to little more than Slave Labor. No benefits, no health care, no retirement, and a bomb shell for the taxpayers to cover later.
Example: BMW has temporary workers with 14 years on the job. 80% of their work force is temporary: “Slave Labor.” Something the Germans seem to be well known for in Europe during World War 2.
YES, I KNOW, SO THE TRUTH HURTS DOESN’T IT!
This is what happens when the USA is run by idiots, fools and corporate crooks. They sell out the USA workers to “FREE TRADE RIP OFFs. ” Just like Ross Perot predicted: “the Giant Job Sucking Sound.” Not so funny now for all the fools that voted for Bill Clinton’s disastrous NAFTA DEAL.
Please provide sources and links if available.
Try the Greenville and Spartanburg Chamber’s of Commerce.
I saw these numbers in an article in BusinessWeek Magazine and again in several other local places including the State Newspaper, Greenville News, and the various business journals. I believe it is also in BMW’s public Tax declarations and Annual USA Report. The SC State Dept. of Commerce also has these numbers.
It’s also interesting to see how many SC State Agencies are using this “Temp to Never Hire,” scheme. For example, the Governor’s Schools have numerous people employed over half a decade as temps. Many State Agencies are also using this Scam.
“Temp To Never Hire,” has become SC’s number one employer. I have several family members caught in this trap. I bet if you ask around, you will know several others: too.
It’s an outrage and should be abolished!
If you look at the numbers, specifically Greenville, they are doing well. I can’t recall Spartanburg off the top of my head, but better than average.
Yes, we have high unemployment, but I personally prefer to use workforce participation. Even unemployment is getting better, but not as obvious in that area that participation is growing.
Good points: all.
I believe the sad thing here is that we are making our workers race to the bottom. Ross Perot warned in 1993 that if we allowed our workers to be open to the world’s labor markets. Then we would have workers with 3rd world skills, being paid 3rd world wages. But, living in a 1st world country.
We need some levels of Fair Trade with the rest of the world.
But, Fair Trade is not Free Trade.
And, the difference is destroying our country.
U6 the broadest measure of unemployment is 10.8% nationally. They don’t keep those figures at the state level. It is down 1.0% from April 2014 and 5.3% since January 2011 when Haley took office. Again their is no state level data. SC jobs made huge gains in all categories except construction. Try dinosaur links in last link.
http://www.bls.gov/news.release/empsit.t15.htm
http://data.bls.gov/timeseries/LNS13327709
http://www.bls.gov/eag/eag.sc.htm
BLS = Obama = untrustworthy = skewed numbers = you being fucked up.
Offer some evidence.
Zerohedge and Jim Clifton use the BLS and BEA data when it suits their purpose and then claim it’s skewed when it doesn’t.
?ssnd ?u??s ? ???? sn?oop b?q ?uo s? ??qq??
I appreciate your intelligent contribution.
I don’t allow anyone to follow me BT, so think it polite to ask – do you mind if I follow you? You often post information I am interested in. If not, I understand and no need to respond.
Be my guest. Negative insults or compliments tell me the same thing. I’m getting through.
I call it like I see it. I agree where I can and disagree where I do. If I see evidence contrary to belief, then I am subject to change my mind. I know it is unpopular to change your mind, but not in my world. I guarantee you BLS or any democratic influence BLS might have is not fudging the numbers for SC – last I read they don’t like us much ;)
Thanks!
There are errors, but overtime they are revealed. There is an interesting contradiction. GDP and GDI (Gross domestic income) are supposed to be the same. One measures expenditures and the other measures the income side. Every expenditure is supposed to be someone else’s income. There is a large difference this past quarter. GDP was -0.7% but GDI is +1.4%. I bet it has to do with when they are dated.
Funny you should mention the stigma attached to changing one’s mind…I fight this constantly in my work circles. I send out the following quote (generally attributed to John Maynard Keynes) to some random knucklehead defending a bad position (usually with old facts) about 17 times a week…
“When my information changes, I later my conclusions. What do you do, sir?”
I hear over and over, “you need to be dogmatic, blah blah blah….” It is my opinion to be so dogmatic as to look at the world with a narrow view of biased opinions, without taking in new information, is far more dangerous than opening your mind to the world of possibilities.
Subject to change your mind?Or change screen names everyday.Or delete posts everyday.Or delete Disquis account everyday.
I don’t delete my comments, you can’t Special Agent Garbage, they only change to “guest.” For the last time, I have ONE Disqus account. In the past when you delete your Disqus account, your comments change to guest. Disqus has apparently upgraded, when you delete the account, it deletes comments with it. I “updated” my Disqus yesterday, my comments are still there.
I can change my mind, my screen name, or delete my Disqus altogether – as can anyone on this site.
BMW does it’s best to hide these figures. But, they have to show them and they are listed on their Federal Tax and Labor Filings.
Jobs are being crushed in SC and else where by the “Temp to Not Hire,” lie. Go to this below link for an excellent story with the true numbers. It will disgust you.
http://www.propublica.org/article/the-expendables-how-the-temps-who-power-corporate-giants-are-getting-crushe
Interesting excerpt from your link
With the major provisions of health-care reform set to take effect in 2014, there’s growing evidence that 2013 is becoming a boom year for temping out. Temp Works, which sells software that keeps track of payroll and worker orders, says sales to staffing agencies have been going through the roof and that temp firms tell them the uptick is because of Obamacare.
Obamacare: good idea; massively bad reality.
I think they are just making stuff up to justify keeping people on Temp status.
That is encouraging news! I started out supporting Gov. Haley’s economic development plan, but as the plan went on, it seemed far too much a gamble to me. I’m still not sure how much these jobs are costing us, but the fact the labor participation is growing here is encouraging.
Fuck you, dumbshit.
Fuck you,dumbshit.
go douche out your stink pussy.
lick tangos dusty balls.
Santee Cooper, Duke Energy and SCANA commercial rates are NOT comparable. Santee and Duke are much cheaper than SCANA. Don’t believe it? Why are corporations with factories moving to Upstate and Low Country where they can get on Santee and Duke grids or co-ops? Although Boeing is serviced by SCANA, ask the executives there who worked with SCANA about their nightmare experience with them. Our legislature gives these SCANA clowns a monopoly and a rate hike whenever they want it and screw the public and SC companies. As long as this continues the only ones making money is SCANA and their out of state institutional shareholders.
SCANA might not get Santee Cooper in a sale. Most likely it would be Duke or Southern Company which owns Georgia Power. Or, it just might be an investment company that will leave everything “as is.” Further, if taken public, nothing would change; as SC could still control 51%. And, the SC taxpayers get a big pile of money to fix the roads, education, etc. and put back into the Reserve Fund.
Generating Power output by Santee is limited, dumbass.
Sell the most valuable natural resource in the state? Don’t think so. I could see all those beautiful cypress and tupelo trees cut and loaded on a ship to China.
You cant sell it. It has been the check book for the rich and powerful for decades. If the likes of Hugh Leatherman can satisfy their needs from it you know it must be GOOD STUFF!
Santee Cooper is not controlled by the State. It is an independent entity. The State started it and granted it extraordinary authority and then left it to be plundered by the people that started it!
All the more reason for the state to divest … Extraordinary authority always leads to an extraordinary imbalance in revenue, rates and taxes. “The bureaucracy is expanding to fulfill the needs of an expanding bureaucracy.”
Absolutely agree with those who know this to be a truly foolish short-sighted proposal that will ultimately boomerang and dramatically raise rates on energy cusromers across the state over thr long run. Avoid this like the plague.
Bullshit.
Sell it! You sell something that has that kind of return!. Byrd only sees a chance for personal gain. That is the problem with this state now.. Hell man, sell SC State Get your head out of your ass.
Fitsnews needs to sue the BBC for stealing it’s photo journalism.
http://www.bbc.com/news/world-middle-east-32930004
https://www.fitsnews.com/2015/05/24/about-that-islamic-state/
While fits article is older, the BBC uses a wider shot. Hmmm…
That guy should run for governor of South carolina. That was one of the most concise clear headed proposals I have ever seen on this site. Why do I have to come log on fitsnews.com to get the very best of south carolina political (& other news). The State newspaper sure as shit ain’t cutting the mustard.
I like the idea of going public and even keeping as much as 60 % of the stock held privately. If you have this type of an asset you should profit from it.
The only downside is the idiot law makers and those they put in charge of Dept of transportation (Robert St onge you drunk driving reprobate I’m talking about you now ) or dhec or DSS – have not a clue of what needs done.
Look at the Richland school districts that they throw money at to no avail.
No accountability
Only in government service can you see the worst of the worst fail upward.
Kind of like being a manager at federal express.
So. Fitsnews. High marks to you.
This is my go to website and may you continue to tell it like it is.