RALEIGH Ė Itís about time this started happening. Over in Lenoir County, small businesses are complaining about the way that corporate-welfare grants Ė some call them incentives Ė work to the disadvantage of most existing firms in a local market.
The specific case here involves Hoover Custom Tops, a small manufacturer and retailer of countertops. As a sweetener for locating in the county, Hoover got a subsidized price for two acres of land for its facility. Other companies that sell similar products are crying foul. Why should Hoover get a special gift of tax dollars, thus giving it an unfair advantage?
Local officials defend the deal by arguing that manufacturing, not retailing, is what the county needs to encourage. Thatís silly and beside the point. They also say that Hoover must meet performance criteria to get the subsidy. Thatís also silly: the complaint is not that Hoover wonít prosper but that it may well prosper with government help.
The conflict between large and small businesses over economic development is not confined to the Kinston-Lenoir community. Itís becoming evident across the state. There is grumbling in Forsyth County about the massive welfare package for Dell Computers Ė while IBM, over in the Triangle, wasnít too happy about it, either. Small businesses in other communities are also furiously eyeing the parade of corporate bigwigs come in and out of state and local government offices with big smiles on their faces.
There are many solid economic arguments against our current incentive policies, which can be browsed here. But there is also a political one for executives and lobbyists to consider: every Dell-like announcement further divides the business community and worsens public perceptions of corporations. This cannot be in the long-run interest of North Carolina businesses, large or small.
Hood is president of the John Locke Foundation and publisher of Carolina Journal.