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Columbia Business Monthly

DuBose and DuBose on McMaster V. Smith

Oct 12, 2018 10:55AM ● By Kathleen Maris

This November, South Carolinians will choose either Republican Henry McMaster or Democrat James Smith to be governor. After interviewing the candidates, conducting extensive research on their public comments, and reading their campaign materials, here’s what we think business owners and citizens alike should know before casting their votes.

Meet the Candidates

Formerly South Carolina’s lieutenant governor, McMaster became governor when Nikki Haley was tapped by President Donald Trump to become the U.S. ambassador to the United Nations. Over the course of McMaster’s long political history in South Carolina, he has been an intern for U.S. Sen. Strom Thurmond, a federal prosecutor, a U.S. attorney (appointed by President Ronald Reagan), a board member with the S.C. Commission on Higher Education, and the state attorney general.

Under Gov. McMaster, South Carolina has seen its lowest unemployment rates in two decades (the July 2018 rate was 3.6 percent). McMaster credits recent Republican federal tax cuts for the strong employment figures and economic development in his state. He said, “I believe that a strong state economy produces jobs and helps our prosperity, but it also creates positive morale among our people.”

In addition to being the Democratic candidate for governor, James Smith is an 11-term state legislator, a small business owner, an attorney, and a major in the Army National Guard. Setting Smith apart from most other politicians is his active duty combat experience. During a visit to Ground Zero in New York City shortly after 9/11, Smith, whose family’s military history goes back to the Revolutionary War, was inspired to resign his JAG officer commission and re-enlist as an infantryman.

Although that meant re-entering basic training at age 37, “I wouldn’t have traded anything for that,” he told us. “I was serving as a House member at that time and had just passed First Steps...and all of a sudden, I’m cleaning latrines at 3 a.m.” Smith spent 12 months embedded with Afghan forces as a combat advisor and was awarded the Bronze Star and the Purple Heart.

Addressing Infrastructure Needs

Both McMaster and Smith believe that South Carolina’s aging infrastructure must be fixed to entice new business development within the state. However, they disagree on where to find the money — an extra $1 billion a year is needed, by the S.C. Transportation Department’s (SCDOT) estimates — to fund the repairs.

Smith voted for H3516, a bill to increase South Carolina’s gas tax to pay for the repairs. McMaster, however, believes that reforming the SCDOT to ensure that tax dollars are spent wisely would pay for the repairs; he vetoed H3516. Members of both parties in the Senate and House voted to override the governor’s veto in May 2017.

McMaster says that he has a 10-year plan to fix the state’s roads and bridges, but wants more control over how local governments spend monies designated for infrastructure repairs and projects. He has also installed six new members on the SCDOT board with the goal of making it more effective.

Smith, meanwhile, believes “you cannot move this state forward if you’re willing to leave some behind.” As a result, a major plank in Smith’s economic platform centers on expanding internet access to rural areas. He’s also concerned with ensuring that rural residents have adequate healthcare available (several rural hospitals have closed recently), and he proposes expanding aviation runways to 5,000 feet to improve rural access.

For his part, McMaster endorses deepening Charleston Harbor to make it the most competitive eastern American port and expanding the highway system (specifically, I-73 to the Grand Strand and Pee Dee and the I-526 extension across Johns and James islands).

In a departure from the typical party line, McMaster is against offshore oil drilling in South Carolina; although it would make money for the state and employ more workers, one oil spill could harm the environment and tourism for years, he said. McMaster has also supported several preservation measures as governor, including one protecting St. Phillips Island near Beaufort.

Improving Education to Attract New Investment

South Carolina’s education system currently faces many challenges, but none are more pressing than the current teacher shortage.

To attract more teachers, Smith wants to raise their salaries above the southeastern average. He also plans to create an education taskforce of teachers with classroom experience and to decrease bureaucracy, paperwork, and excessive student testing. He supports allowing the governor to appoint the state’s secretary of education — currently an elected office — but only individuals with 10 or more years of teaching experience would be eligible for the position.

Another important component of Smith’s strategy for attracting new businesses is making South Carolina “a competitor in the world talent race by creating scholarships and linking together businesses and educational institutions” through workforce education. Citing the success of programs like New Tech, which has improved the report cards of some poor schools along the I-95 corridor, Smith proposes introducing activities like project-based learning to more classrooms. The goal: to train a well-educated workforce possessing the skills that businesses seek. His economic platform also places an emphasis on matching veterans with available jobs through training programs and continuing education opportunities.

McMaster agrees with Smith that workforce training is necessary to attract and create big and small business. He describes South Carolina’s technical education centers as “some of the best in the nation” and would like more students to consider technical training. Rather than pushing four-year colleges, parents should encourage their children to seek other educational paths as well, he said.

“People who used to carry tool boxes are now carrying laptops. Skilled, experienced auto mechanics and welders are making $80,000 a year, while many college graduates can’t find work,” McMaster said. He wants to provide grants and incentives to small businesses for attracting talented interns from high school, technical schools, and four-year colleges for practical, on-the-job experience. He says he would encourage more research development agreements with South Carolina’s universities, such as the University of South Carolina and Clemson University have done with Samsung. He also supports workforce training to help prison inmates who have completed their sentences.

Bringing in New Businesses

McMaster’s stance is that “conservative, pro-growth policies” will “attract businesses and bring jobs.” Part of this strategy is to reduce “over-burdensome” business regulations, and another is to meet with business leaders to hear their ideas about what would make it easier to operate in South Carolina. He has also ordered state agencies to seek ways to reduce paperwork and eliminate unnecessary regulations.

Smith has specifically stated a desire to attract businesses based in “emerging fields” like solar and renewable energy. He noted that North Carolina is a leader in solar energy, producing thousands of kilowatts of electricity per year, while South Carolina’s output is drastically less. “The sun shines just as bright here in South Carolina,” Smith said, noting the possibility for expanding solar power in the state.

According to him, one of the factors harming South Carolina’s competitiveness in the eyes of new businesses is its high utility prices. He plans to require a consumer advocate to balance the interests of utility companies and their customers. The energy office will also report directly to the governor.

Although the state has done well at bringing in manufacturers, “huge challenges” remain in attracting knowledge-based jobs, Smith said. He believes that in order to obtain and keep the type of talent required to staff these jobs, South Carolina must improve the quality of life it offers residents through providing better healthcare, fostering a vibrant creative community, and improving education. Interestingly, Smith also plans to promote the film industry in the state. He said that he is seeing increasing numbers of film workers from the Palmetto State, and that tax incentives to entice movies to film here have paid for themselves.

Keeping Big Businesses in the State

Both candidates emphasized the importance of keeping large employers like Boeing, Volvo, and BMW in South Carolina. In addition to generating jobs and paying taxes, these companies also encourage the growth of the small businesses that support them. Therefore, the two candidates are concerned about the tariffs being imposed by President Trump. BMW has warned the U.S. Commerce secretary that the tariffs would harm BMW’s exports from its Spartanburg County factory and could put employees’ jobs in danger. Government studies indicate that 10 percent of all imports will be impacted, leading to higher consumer prices.

Smith emphasized that tariffs not only harm the auto industry, but also agribusiness — a serious issue, as about 25 percent of South Carolina’s land is dedicated to farming, according to S.C. Department of Agriculture figures.

McMaster said that he has asked President Trump to reconsider the tariffs, especially in relation to the auto industry. He said that leaders of all affiliations will need to creatively adapt to the tariffs if they are implemented.

You can read detailed information about each candidate’s platform, background, and views at: mikedubose.com/governor2018

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