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SOUTH CAROLINA: What matters in South Carolina

BBQ SC 1The Auto Lobbyist:  from the Chronicle of Higher Education

If you can learn how to make love in the backseat of a Volkswagen, you can learn to read and write in a barn,”

Patrick E. Watson, a longtime lobbyist for South Carolina car dealers, secured a big tax break for his clients. Deals of this sort have taken money off the table in states where public colleges’ budgets have been slashed.

To the extent that he thought about public colleges at all, it was only to revel in memories of 1969, when he captained the University of South Carolina football team.

Mr. Watson’s greatest legislative coup begins one morning in 1984, when the governor’s top man summoned him to Cogburn’s Restaurant, in Columbia. Many a deal had been struck at the popular hangout in the state capital, where politicians and business leaders were known to trade horses over $4 rib-eye steaks, fries, and toast.

As Mr. Watson ate that morning, a war was brewing. Gov. Richard W. Riley, a Democrat, had proposed a one-cent increase in the sales tax to pay for improvements to elementary and secondary schools. Auto dealers hated the idea, fearing it would hamper car sales.

Hoping to placate Mr. Watson, the governor’s emissary made his first pitch: Call off your dogs, he said, and we will insulate your businesses from any tax hikes. At that moment, no one mentioned higher education.

It was a sweetheart deal for Mr. Watson, who was executive vice president and chief executive officer of the South Carolina Auto Dealers Association. But he wasn’t buying. Instead he stirred up his base, telling association members to stick to their guns.

“If one guy at Rotary Club says, ‘We’ve got to raise taxes,’ ” he told them, “you don’t be afraid to stand up and say, ‘You’re crazy as hell.’ ”

The strength of Mr. Watson’s army of car dealers, who populated every electoral district in the state, had lawmakers in a panic. The political winds were shifting in favor of the governor’s “penny tax,” but legislators feared getting on the wrong side of Mr. Watson. His talking points were powerful in a tax-averse state like South Carolina: Poor people here need cars to get to work, and they can’t afford to pay more in sales tax. It was bad teachers, not old buildings, the lobbyist argued, that were holding back education.

“If you can learn how to make love in the backseat of a Volkswagen, you can learn to read and write in a barn,” Mr. Watson said during a public debate with one of the governor’s supporters.

In their frantic efforts to satisfy Mr. Watson and his members, lawmakers soon rallied around a compromise not unlike what had been floated at Cogburn’s. The sales tax would increase by 1 percent, but taxes on the sales of cars, boats, and even airplanes would be capped at $300.

“The cap,” as it is known in South Carolina, is described by higher-education officials there as a giveaway to special interests that are less worthy than public colleges. Whether South Carolinians buy a Mercedes-Benz for $200,000 or a Ford Fiesta for $14,000, they pay the same sales tax.

The cap cost the state an estimated $169-million last year, which would be sufficient to restore about half of the cuts made to public colleges since 2008.

And the state’s budget pie just got even smaller. In recent months, South Carolina lawmakers decided that half of the revenue generated by the state’s capped sales tax for vehicles should go to road improvements rather than to a general fund that could finance other interests, such as higher education and public schools.

 Mr. Watson says the cap as a success. Dealers sold more cars as a result, he says, and that is good for South Carolina.

 


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