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SC Launch Funding Cut

Note by Theodore Tanner: hello all i dont understand the math here. it is my understanding that sc launch gives 200k per company. 9.5m across 83 companies doesnt equal 200k. maybe i am missing something?

By Scott Miller
smiller@scbiznews.com
Published Dec. 15, 2008

The sole source of funding for SC Launch would be eliminated under Gov. Mark Sanford’s latest tax proposal.

Sanford’s plan does not have the support of House Speaker Bobby Harrell, however.

The Industry Partnership Fund, one of 14 tax incentives the governor wants to cut, allows individuals and corporations to make tax-deductible donations to SC Launch.

In fiscal 2008, the nonprofit SC Launch received $6 million under the Industry Partnership Fund, the maximum amount the law allows taxpayers to designate for SC Launch under the program, but which doesn't limit the amount SC Launch can receive in a given year from donors. Seventeen corporations and 145 individuals contributed in 2008, compared with 116 total contributors in 2007. The maximum amount each donor can deduct is $2 million.

SC Launch uses the money to provide seed capital to startup companies. Since its inception in 2006, SC Launch has invested $9.5 million in 83 companies across the state.

“It’s the only way we have right now to fund that program,” said Bill Mahoney, CEO of the S.C. Research Authority, which oversees SC Launch. “We’d have to find another way to do it. I’m not exactly sure how we would do that.”

Sanford said the state is better served by eliminating its 5% corporate income tax. To offset the loss of funding, Sanford wants to eliminate 14 tax incentives, including the Industry Partnership Fund tax credit.

The move has the support of the Tax Foundation, a nonpartisan think tank in Washington, D.C., that said Sanford’s policy will better the business climate in South Carolina and attract new industry.

Harrell, however, is not on board, spokesman Greg Foster said.

The House speaker supports cuts to income taxes but doesn’t think the state should eliminate job creation tools as unemployment continues to increase, he said.

“A lot of those are proven job creation tools that (former Gov.) Carroll Campbell fought to get passed,” Foster said. “At a time when the unemployment rate could reach double digits, we need to be providing the governor with tools to create jobs. … Our unemployment rate has been among the highest in the nation for far too long.”