One of the hottest debates in North Carolina surrounds how to promote economic development in the state. Some advocate targeted tax breaks, government subsidies, and other incentive policies while others say that low overall taxes, reasonable regulations, and good public services are the right approach.
(6.10.15) Green Tax Credits Big Business for Big Business
RALEIGH — While Duke Energy is passing higher costs to ratepayers because state law forces it to purchase renewable energy, the utility also claimed a whopping $62.8 million in tax write-offs in 2014 for its own investments in green power projects.
(5.26.15) House Budget Faces Uncertain Future
RALEIGH — An unusual coalition of 12 liberal Democrats and 11 conservative Republicans comprised the only formal opposition to the $22.1-billion General Fund budget passed around 1:00 a.m. May 22 by the state House of Representatives. The spending plan, approved by a 93-23 vote, is expected to undergo dramatic changes in the Senate and received a less-than-enthusiastic response by Gov. Pat McCrory, who has tended to align more closely with the lower chamber in fiscal debates.
(5.12.15) JLF: End Targeted Corporate Tax Incentives
RALEIGH — North Carolina lawmakers would harm, not help, the state’s economic growth if they extend and expand corporate tax incentive programs. That’s the key conclusion from a new John Locke Foundation Spotlight report. The report arrives as legislators debate the future of the state’s incentives.
(4.01.15) PARODY: New GOP Incentive Plan to Feature Welfare Wednesdays
RALEIGH — Gov. Pat McCrory will propose $1 billion in bonding authority to fund a Division of Corporate Welfare based on a model concluding that, when properly administered, business incentives pay for themselves.
(3.30.15) Spirit’s Job Numbers Far Below Expectations
RALEIGH — Although the Spirit AeroSystems facility at the Global TransPark will not receive all the incentives it could have, critics call any purported "savings" beside the point. They say it's impossible to predict how a company will perform, calling into question whether economic incentives really are the key to landing out-of-state companies.
(3.19.15) Senate Plan Would Cut Corporate Taxes, Cap Incentives
RALEIGH — Senate Republicans are pushing bills to reduce the state corporate income tax rate from 5 percent this year to 3 percent in 2017, and restructure the manner in which corporate taxes are calculated. The intent behind the legislation is to make the state more business-friendly and better able to compete with its neighbors in job recruitment.
(3.11.15) Of Course Taxes Matter
I prefer across-the-board tax reduction to targeted tax incentives not only because I have read many academic studies but also because I have met many politicians.
(10.14.14) Audit: Rural Center Has Failed To Return State Money
RALEIGH — The audit of the Rural Economic Development Center, released Monday, determined that it was impossible to verify interest earnings on some funds because they were comingled in a revenue pool with money that did not bear interest, and records were not kept well enough to distinguish how much came from paid interest and how much was from other revenue sources.
(9.22.14) Price Tag For State Economic Incentives: $800 Million
RALEIGH — Commerce Secretary Sharon Decker recently spent four days in Tokyo on a trade mission attempting to recruit an automobile manufacturing facility to North Carolina, which could have taxpayer-funded incentives wrapped into the deal. Meanwhile, a legislative analysis shows that the state’s liability for such programs already could top $800 million.
(8.22.14) Stick With the Winning Playbook
North Carolinians have no need to look north, west, or south for advice on how to recruit businesses or promote economic growth.
(8.20.14) Stick With the Winning Playbook
North Carolinians have no need to look north, west, or south for advice on how to recruit businesses or promote economic growth.
(8.06.14) Giving Credit for Grants
The public is better served when spending is clearly spelled out in annual budget documents, where it can be evaluated against alternative uses of the dollar.
(6.12.14) No Need for New Targeted Tax Incentives
Lower tax rates and a neutral tax code are the best ways to create jobs and generate growth.
(6.06.14) Senate Gives Initial Approval To Leaner Film Incentive Program
RALEIGH — The new fund, called the Film and Entertainment Grant Fund, would replace film tax credits, which are set to expire at the end of the year. To qualify for film grants, a production company must spend at least $10 million for a feature-length film or $1 million per episode for TV series. Companies producing commercials for theatrical or television viewing, would have to spend $500,000.
(6.03.14) Film Industry Trashes Critique of Incentives
RALEIGH — Lobbyists for North Carolina’s motion-picture industry, in an attempt to preserve an expiring taxpayer subsidy for film production in the state, are circulating two “talking points” documents to lawmakers attacking the credibility of those who have questioned the figures the industry uses to tout the value of the film incentives.
(4.05.14) Legislative Staff Savages Film-Industry Study Defending Subsidies
RALEIGH — North Carolina loses 54 cents for every dollar it allocates to the state film production credit, and the actual return on investment might be even worse, concluded a memorandum from the General Assembly’s Fiscal Research Division. The Fiscal Research authors noted in several parts of the memo that glaring errors and mistaken assumptions were pointed out prior to publication of the report but were not corrected.
(3.31.14) Impact of Film Industry On N.C. Jobs Unclear
RALEIGH — The 25-percent refundable state tax credit offered to film production companies may be in trouble. New legislation may be drafted to preserve incentives for filmmakers, but it’s not clear how many jobs the industry provides in North Carolina, and whether offering tax credits is a net economic benefit to the state or simply a drain on the treasury.
(3.25.14) Greensboro Council Backs Downtown Arts Center
GREENSBORO — The Greensboro City Council approved a memorandum of understanding with a local nonprofit that paves the way for a new $65 million downtown performing arts center. The potential cost to taxpayers over the years is a real issue, one that City Council members who support the performing arts center concede.
(2.27.14) Greensboro Hotel Incentive Keeps Handouts Flowing
GREENSBORO — This is not the first proposal for subsidies to aid a downtown Greensboro hotel. A few years ago a deal to build a hotel on Elm Street using federal stimulus funds created a buzz — mostly because the site was being brokered by then-Guilford County Commissioner Skip Alston. But that deal lost steam when the deadline to apply for federal funds came and went.
(11.22.13) Greensboro Banking On Campus To Jumpstart Downtown
GREENSBORO — Tentatively named “Downtown University Campus,” local officials say the mixed-use development, which among other things will provide a presence for the city’s seven colleges and universities, along with Moses Cone Healthcare, “will be a great place to live, work, play — and study,” said Mayor–elect Nancy Vaughan.
(9.19.13) Amusement Park Takes Taxpayers For A Ride
Charlotte and Mecklenburg use a creative interpretation of a business incentive plan to give Carowinds a taxpayer subsidy.
(9.18.13) Lawsuit Claims Panthers Negotiations Broke Open Meetings Law
CHARLOTTE — According to transcripts of a Feb. 8 closed session of the Charlotte City Council, board members discussed renovations to the stadium where the NFL’s Carolina Panthers play. They also discussed asking the General Assembly to increase the city’s prepared food tax by 1 percentage point in hopes of raising $144 million to pay for stadium renovations.
(9.09.13) The Right Way to Cut Taxes
Eliminating special breaks and lowering marginal tax rates for everyone constitute sound tax reform by any reasonable definition. It’s also good for business.
(8.12.13) Legislature Extends Little-Used Local Debt Vehicle
HILLSBOROUGH — State Sen. Jeff Tarte, R-Mecklenburg, believes Special Assessment District revenue bonds may be the fairest method of taxation for economic development infrastructure projects even if the financing instrument attracted only one successful applicant in the five years the bonds have been an option for local governments.
(7.27.12) It's All About Incentives
While incentives may be of great interest to big, mature companies, they are largely irrelevant to the creation of new companies that generate most new jobs and income growth.
(6.12.12) Government Tries To Bolster Biofuels Market
RALEIGH — The legislature allocated $4.5 million to North Carolina Biofuels Center in the current fiscal year, down from $5 million in previous years, to solve the costly renewable energy riddle. Critics say there would be no market for biofuels without taxpayer subsidies.
(5.01.12) Critics Call Solar Plant in Robeson County A Turkey
RALEIGH — FLS owns and operates the solar thermal installation at Prestage Farms in St. Pauls. It sells low-cost electricity to the farm and gets a lucrative mix of state tax credits for construction, and revenue from renewable energy certificates sold to Duke Energy.
(3.13.12) Left, Right, & Center on Incentives
Can you see now why the Left and Right, coming at the issue from very different starting points, tend to be against corporate subsidies while the Center favors them?
(3.06.12) Incentives, Low Property Taxes Boost North Carolina Rank
RALEIGH — The study factored in tax incentives offered by state governments and highlighted taxes that would be more meaningful to Subchapter C corporations rather than to sole proprietorships, partnerships, or limited liability corporations.
(2.24.12) Georgia Won Caterpillar Bid For Many Reasons, Not Just Ports
Basing economic development policies on the decisions of one company is unwise. And these decisions are made for many reasons.
(2.22.12) NCICL Looks to Expand Mission of Limiting Government
RALEIGH — The institute made its first big headlines in a 2005 landmark case taking on tax credits and other economic development incentives for Dell to build a manufacturing plant in Forsyth County.
(1.27.12) N.C. Maintains Low Score in Business-Friendly Rating for Taxes
RALEIGH — The Tax Foundation's annual index is designed to assess the business friendliness of tax policy in each state based on principles of neutrality, simplicity, broad bases, and low rates. North Carolina moved from 46th to 44th last year.
(10.07.11) N.C. Senate Leader Uses Continental Tire Blowout To Question Incentives
RALEIGH — The issues that troubled Sen. Phil Berger surrounded an incentives proposal for German-based Continental Tire that fell through this week. Despite North Carolina’s incentives offers, the company announced plans to build its new plant instead in Sumter, S.C.
(10.05.11) Solar Proposal At Buncombe Schools Attracts Critics
ASHEVILLE — Rising costs and diminishing returns for the school district, and allowing a for-profit company exclusive use of a public building as a potentialy lucrative, subsidy-laden “investment scheme” are reasons cited by school board member Lisa Baldwin for her opposition to the initiative.
(4.14.11) Rural Center Grant Could Put Sanford Company Out of Business
RALEIGH — Allied promises to create about 40 jobs in Lee County, where unemployment was 12.1 percent in February. But the move potentially could shutter Sanford Steel & Pipe Corp., which never has accepted government funding in its 60 years of business.
(1.18.11) Perdue Stands By Incentive-Based Employment Programs
RALEIGH — A linchpin of Perdue’s jobs program is the formation of roughly 90 public/private partnerships, in which private companies agree to relocate or expand in North Carolina in exchange for cash incentives, tax breaks, or some combination.
(1.11.11) Lawsuit Seeks to Force Culinary School to Return $7.5 Million in Taxpayer Funds
RALEIGH — A lawsuit, filed by the N.C. Institute for Constitutional Law on behalf of two Charlotte-area residents, seeks to force Johnson & Wales University to refund $7.5 million in taxpayer funds the culinary school has received since 2003.
(9.22.10) Stumbling Around on Incentives
To award government favors without employing a realistic financial model is to set yourself up for a pretty big stumble.
(9.20.10) Finally Getting Down to Business
Many business groups spend much of their time actively lobbying for government intervention in the market – in the form of subsidies or regulations damaging their competitors.
(7.08.10) ObamaCare Adds Uncertainty to Biotech Incentives Bill
RALEIGH — Opponents say the bill is more corporate welfare, runs afoul of the state Constitution (PDF download), and puts venture capitalists’ risk on the backs of taxpayers. Sponsors say the measure is necessary to spur economic growth and create jobs.
(6.21.10) Economic Incentives Package Heavy on Subsidies for Film Industry
RALEIGH — The proposed credit has raised more eyebrows than usual in a General Assembly that has been generous with economic incentives over the past decade. House Bill 1973 would allow film producers to compensate talent more than $1 million and still claim the tax credit; the current film tax credit caps allowable expenses at $1 million.
(6.16.10) Biotech Venture Capital Bill Back on Legislative Menu
RALEIGH — The measure, known as the Life Sciences Development Act (House Bill 530), would establish a private limited liability company to make taxpayer-funded loans of up to $30 million each to biotech companies. To underwrite the loans, the Life Sciences Development company would sell equity certificates (similar to shares of ownership) to investors.
(5.30.10) Southport Port Proposal Spurs Opposition
SOUTHPORT — The project has attracted significant opposition from NoPort Southport, a nonprofit established to oppose it actively. A study commissioned by NoPort Southport questions the ability of a new port to handle enough traffic to make it viable commercially when the nearby Wilmington port, also owned by the state, is being expanded.
(5.25.10) Lady of the Dance
The best economic-development policy is not to focus on individual recruitment prospects but rather to improve the overall business climate.
(5.11.10) Still Don’t Want to Know
If North Carolina lawmakers had listened to advice before, they would not have squandered hundreds of millions of dollars on a pointless exercise.
(4.16.10) Ongoing Employment Woes Should Prompt Change in N.C. Tax Policy
RALEIGH — New state data show North Carolina entering its second year of double-digit unemployment. The John Locke Foundation's top budget expert says evidence of continued employment woes should prompt elected officials to scrap policies that hurt job creation.
(4.07.10) VIDEO: N.C. Seeking Better Ways to Keep Tabs on Incentives
RALEIGH — Members of the General Assembly’s Revenue Laws Study Committee got into a heated discussion about one of the largest incentive deals in North Carolina — the nearly $300 million enticement to Dell. The computer manufacturer claimed a small fraction of the tax credits offered to it, and it has since announced plans to close its plant. It was open for less than 5 years.
(3.31.10) N.C. Innovation Fund May Face Constitutional Roadblock
RALEIGH — Courts have ruled that states can’t discriminate against interstate commerce in a way that favors one state over another in what’s known as the “Dormant Commerce Clause.” The North Carolina Institute for Constitutional Law believes Treasurer Janet Cowell’s Innovation Fund may flout that provision.
(3.16.10) $230 Million Innovation Fund Will Divert Pension Money Into Tech Firms
DURHAM — State Treasurer Janet Cowell has named Credit Suisse to manage a new $230 million investment for the state’s pension fund in businesses with significant operations in North Carolina.
(3.01.10) TransPark Still Broke With No Way to Retire Debt
RALEIGH — Even though the Global TransPark has landed an “anchor tenant” in Spirit AeroSystems, a Wichita, Kan.-based company that is set to start manufacturing large aircraft components later this year, government incentives to Spirit mean taxpayers will subsidize employment at GTP to the tune of $200,000 per job.
(2.10.10) Leave Taxpayers Out Of It
Whenever the government gets involved in a dispute over how to spend money, it guarantees that someone will be treated unjustly.
(1.27.10) Tax-Funded Redevelopment Alive and Kicking in Greensboro
GREENSBORO — A couple of months after Greensboro voters elected Mayor Bill Knight and a new City Council to restore fiscal accountability in city government, the council has found itself embroiled in two complicated and controversial projects that involve some form of taxpayer financing.
(1.21.10) A Farce Playing in Garner
North Carolina’s state and local politicians have officially exhausted my ability to understand what the heck they think they’re doing.
(1.15.10) North Carolina’s Phantom Jobs
Targeted incentives had never really been about creating jobs. They were about creating job announcements.
(11.05.09) Guilford County Foe of Economic Incentives Backs Economic Incentive
GREENSBORO — If it looks like an economic incentive, walks like an economic incentive, and quacks like an economic incentive, then it must be an economic incentive.
(10.23.09) Friday Interview: Biotech Incentive Program Critiqued
RALEIGH — Despite some heavy lobbying in the final days of this year’s legislative session, state lawmakers left Raleigh without taking final action on the Life Sciences Development Act. That is good news to Jason Kay, senior staff attorney at the N.C. Institute for Constitutional Law. He discussed the LSD Act with Mitch Kokai for Carolina Journal Radio.
(10.13.09) Biotech Incentives Bill Spurs Constitutional Worries
RALEIGH — An economic incentives bill eligible for consideration in the General Assembly’s short session next year, known as the Life Sciences Development Act, would establish a private company to make taxpayer-funded loans of up to $30 million apiece to biotechnology and pharmacy startups in North Carolina.
(12.17.07) A Case For Competitive Neutrality
If tax breaks for in-state muni bonds were struck down as unconstitutional, it probably would not have a huge effect in dollar terms. But an important principle would be upheld.
(11.16.07) Friday Interview: The Tire Incentives
RALEIGH — Today, Carolina Journal Radio’s Mitch Kokai discusses with Dean Webster, executive director of NC Institute for Constitutional Law, the legislature’s approval of targeted tax incentives packages for Goodyear and Bridgestone/Firestone. (Go to http://www.carolinajournal.com/cjradio/ to find a station near you or to learn about the weekly CJ Radio podcast.)
(10.24.07) Skybus Stop On The Welfare Express
Is there any limit to the kind of corporate welfare Gov. Mike Easley is willing to pass out?
(9.14.07) Tire Giveaway May Yield Surprises
The General Assembly came to town, spent two days negotiating with Gov. Mike Easley and various business lobbyists, and then passed a new incentives bill to replace the one Easley vetoed.
(9.12.07) Tire Giveaway May Yield Surprises
Winning costly victories famously caused Pyrrhus to lose a bloody and consequential war. Perhaps it will do the same for the architects of this week's legislative disaster.
(9.10.07) Politics Of The Veto Session
I’d rather lawmakers vote “no” on all corporate welfare, naturally. But politically speaking, there’s a strong argument for at least voting “no” for the moment.
(8.29.07) You Can Do It, Governor
Veto the bill, Gov. Easley. Fayetteville, the tire industry, and the North Carolina economy will survive.
(7.02.07) NCRC Seeks Millions in Public Funds
RALEIGH — A healthy serving of taxpayer funds will help a planned nutritional research mega-facility, part of a mixed-use development backed by developer and Dole CEO David Murdock. Thanks to the passage in November 2004 of Amendment One to the N.C. Constitution, which provides for local governments to implement so-called tax increment financing without a public vote, a majority of local officials and Murdock are looking for almost $200 million in public assistance.
(6.21.07) Glamour Shot Incentives
When it comes to the hotly debated topic of government subsidies for business, the image typically conjured up bears little resemblance to the actual practice.
(4.26.07) Judges Hear Incentives Arguments
RALEIGH — A three-judge panel peppered lawyers with questions Wednesday in a case that could determine the future of economic development tax incentives in North Carolina.
(4.06.07) Did SC Get a Better Google Deal?
RALEIGH — Web search engine company Google officially announced yesterday it would build a $600-million data center near Charleston, S.C., which would represent a similar investment to one announced earlier this year in Lenoir, N.C., in Caldwell County.
(3.28.07) Nothing Ventured Would Be A Gain
Once down the road of government “investing” other people’s money in private business ventures, it is difficult to know where to stop.
(3.08.07) Some Damage Control on Incentives
Google made many public officials in North Carolina look like yahoos. Now they needed to defend themselves, and chose a Senate Finance Committee meeting as their opportunity.
(2.06.07) The Elasticity of Economic Development
Spending lobbies have figured out that if they can get their pet projects labeled as “economic development,” they have a better chance of securing appropriations than if they identify their real goals.
(11.22.06) The State Remains a Laggard
To the assertion that North Carolina’s recent fiscal policies have produced clearly measurable economic gains, I’d have to reply: show me.
(8.31.06) On Florida, It's Hip to be Square
They may be faddish, but that doesn’t make Richard Florida's economic-development theories about the “creative class” valid or useful.
(8.30.06) Counting On Economic Incentives
Public officials who grant corporate subsidies claim that they’ve done the math, and that the taxpayers are net beneficiaries. Something is being left out of the equation.
(5.17.06) Standing on the Promises of Law
The cause of combatting corporate welfare has taken two brutal punches in recent days. But by far the more painful one came from a North Carolina court decision that imperils constitutional safeguards.
(11.22.05) Another Reason to Limit Government
Smaller government is to be preferred not just to maximize freedom and encourage economic growth, but also to minimize corruption. The case of the Northeast Partnership offers a cautionary tale.
(10.18.05) Developer Questions State Incentives
RALEIGH — In a case of swimming against a tsunami of opinion among his professional peers, the leader of a state economic development agency has announced his support for the elimination of certain targeted tax breaks for individual businesses.
(9.26.05) Real Realism on Incentives
Defenders of North Carolina's economic-incentives policies argue that it is unrealistic to imagine the state bucking the national subsidy trend. Actually, incentives are based on elaborate fantasies.
(8.17.05) Teapot Museum Creates Tempest
RALEIGH — A proposed Alleghany County museum that would display 6,000 teapots worth more than $5 million has become the poster child for pork barrel spending in the recently passed state budget. A $400,000 earmark for the Sparta Teapot Museum was frequently mocked in the media in the past week, and by Republicans in the legislative minority. But Rep. Jim Harrell III, an Elkin Democrat who sought the funding in the state budget, said the museum's critics don't know enough about the project to evaluate its worth.
(8.12.05) NASCAR Go Home
City leaders opt to woo NASCAR officials with a parade route and millions in public money in hopes of landing a Hall of Fame. Good thing all of Charlotte's other problems are solved.
(7.20.05) In This Case, Talk is Expensive
Lawmakers and the Easley administration talked for months about reforming North Carolina's main tax-incentive program. But now it appears the Lee Act will survive two more years.
(7.20.05) Meet Ronnie Bryant
The Charlotte Regional Partnership's new boss could not reverse Pittsburgh's development woes. How will he fare here?
(7.08.05) Expansion Release May Be Premature
RALEIGH — Gov. Mike Easley might have prematurely announced on June 13 an expansion by Colony Tire Corp., which was, according to the governor's press release, “made possible in part by a $50,000 grant from the One North Carolina Fund.” The total cost of the expansion was $800,000, Easley said. His grant might not be enough to seal the deal, however. Charles Creighton, CEO of Colony Tire, said he might turn down the money and move his operation to Virginia.
(6.30.05) Skepticism Would Serve the Public
When company reps or consultants say they will not come to your community unless a government bribes them, the proper response is skepticism. It is likely that the claim will prove to be less than accurate.
(6.24.05) One Case Ends, Another Begins
On the same day that the NC Institute for Constitutional Law filed suit against the Dell incentives, the US Supreme Court bungled another case involving abuse of government power.
(6.24.05) State Faces Lawsuit Over Dell
RALEIGH — Former state Supreme Court Justice Robert Orr said Thursday that the organization he leads filed a lawsuit against state and local governments over the constitutionality of targeted economic incentives offered to Dell Corp. Orr, who last year left the high court to head the newly formed North Carolina Institute for Constitutional Law, is challenging special legislation that awarded Dell $242 million in tax credits and other economic subsidies. He is also suing the City of Winston-Salem and Forsyth County over $37 million they offered to persuade the company to build its East Coast assembly plant in their jurisdiction.
(6.24.05) All Hail Our Wise Leaders
From tearing down old malls to building new grocery stores to widening sidewalks, local leaders seem to have it all figured out.
(6.14.05) Luger Not Loaded This Go Round
The NC Department of Commerce chose not to retain a UNC-Chapel Hill professor to evaluate its main tax-incentives program. Surely this had nothing to do with managing the state’s PR.
(5.23.05) Auto Research Center in Jeopardy
RALEIGH — Boosters of an automotive research center planned for Northampton County, who were hoping for $30 million in taxpayer funding over the next two years, are trying to get their pet project back on track after it was left out of the budget recently approved by the state Senate. Named the Advanced Vehicle Research Center, the project would be located off I-95 north of Roanoke Rapids and would provide automotive testing services at a facility that would include a 2.5-mile closed loop test track, laboratories, garages, and office space.
(5.03.05) Pay To Non-Profit Unauthorized
RALEIGH — The state Department of Commerce, apparently for several years, paid a private nonprofit organization for economic development funds that by law should have been paid to a state-established regional commission. Until June 2003, Commerce's fiscal department issued checks that, by statute and under the biennial state budget laws, should have gone to the Northeastern North Carolina Regional Economic Development Commission. Instead the "pass-through" payments were made to North Carolina's Northeast Partnership, a non-profit organization established by some of the same board members as the Commission.
(3.01.05) Incentives Grant Frustrates Competitor
RALEIGH — The owners of Pate Dawson Company, a Goldsboro food distributor that has been doing business in North Carolina for 120 years, is wondering how the state can justify giving the company’s main competitor, Texas-based Sysco Inc., $10 million to build a distribution center in Johnston County. “I’ve been hearing rumors for a long time that Sysco has been thinking of building a new distribution center either in the eastern part of the state or Virginia, but only last August did I learn they may be trying to get money from the state,” said Pate Dawson’s president. He questions claims of net job creation from the incentives.
(2.25.05) Easley Announces New Jobs - Again
RALEIGH — Workhorse Aviation Manufacturing will open a manufacturing plant at the Global TransPark near Kinston, Gov. Mike Easley said Wednesday. The company will create 50 jobs over the next three years and invest more than $2 million in a deal made possible in part because of $100,000 from the One North Carolina Fund, he said. But in November, Easley announced that Workhorse Aviation would locate the same project in the Trenton Industrial Park in nearby Jones County. The governor’s spokeswoman wasn’t aware of the previous announcement and couldn’t explain why the company changed locations.
(2.18.05) Memos Reveal Doubts on Incentives
RALEIGH — What’s a “related entity”? What’s a “strategic partner”? State officials didn’t know exactly when drafting legislation that would grant $242 million in “economic incentives” for Dell, Inc., to build a computer plant in North Carolina. In emails recently released by the N.C. Commerce Department, crafters of the Dell legislation expressed concern over the definition of some critical language that would allow Dell to set up other entities at the plant site. The emails said that fuzzy language included in drafts of the bill might allow the company to bypass its negotiated guarantees with the state—including the 1,200 full-time jobs supposed to be created by the legislation and $100 million to be invested in the plant by Dell.
(2.15.05) It’s No Exception to the Rule
The Microelectronics Center of NC got a quarter-billion in tax dollars, made a few insiders wealthy, and then teetered on the edge of insolvency. This is a success of government-funded business?
(2.14.05) Who Gets Hurt By Incentives
It was only a matter of time before existing North Carolina businesses took our government to court for subsidizing their competitors. They suffer real harms from the practice.
(2.10.05) When Good News Is Bad News
CHARLOTTE — When is good news the cause of bad news for local government and civic leaders? When it comes to the state’s yearly William S. Lee Act tier designations, in which a stronger local economy can reduce incentives for business investing in and state aid to a county. Under the act, businesses can quality for tax credits by creating jobs, engaging in research and development, purchasing new machinery and equipment, or making certain other types of investments. For Lee Act purposes, the state places counties into one of five categories, labeled tier 1 (worst) to tier 5 (best), based upon how well they are doing economically.
(1.20.05) Weather to Do the Right Thing
It was a day to watch systems break down: to see traffic snarled by a flawed snow-day policy and to see the state's public-records policy snarled by, well, a flawed snow policy.
(1.19.05) CJ Sues to Obtain Dell Records
RALEIGH—Carolina Journal and the North Carolina Press Association filed a lawsuit Tuesday to force the state Department of Commerce to release all public records involved in a reported $242 million incentives package the state offered to Dell Computer Corp. of Austin, Texas. Just a few hours later, Commerce officials announced that the file would be released late Tuesday for public review. News organizations have already filed reports on the contents of some of the newly released documents. The lawsuit alleged violations of the state public-records law and also asked for records on other potential incentive offers.
(1.18.05) New Lowe’s Facility Gets Tax Funds
RALEIGH — Gov. Mike Easley last week gave Lowe's Companies a $100,000 grant because the home-improvement retail company decided to locate a data processing facility in Winston-Salem. Lowe's reported $30.8 billion in sales in fiscal 2003. It will invest $71 million in the data center. The One N.C. grant represents 0.14 percent of Lowe's investment, raising questions about whether the company seriously considered placing the project anywhere else. Lowe's has data centers in Wilkes County and Mooresville, where its headquarters resides. The company said the new data center is expected to employ 20 to 25 people.
(1.14.05) Magazine: NC Overpaid for Dell
RALEIGH — The publisher of a magazine for economic development professionals says North Carolina gave Dell too much in its $242 million incentive package. But at the same time, Southern Business & Development commended the state for opening its coffers for the facility. "While we don't know exactly how the incentive package North Carolina offered Dell is set up, we do know exactly the history of large incentive packages given out to companies that have announced big deals in the South since 1992," the publisher wrote. "That being the case, North Carolina paid too much for the Dell deal."
(1.07.05) Turning on Corporate Welfare
Small businesses are starting to complain more loudly about the unfairness of having to compete with larger ones receiving subsidies from state and local government. Good.
(12.29.04) Race to the Bottom
As if a $130 million wish list for arts projects was not big enough, Charlotte leaders now ponder adding a NASCAR racing museum to the list. Since when is NASCAR hurting for money?
(12.20.04) No to Horse Parks, Yes to Tourism
RALEIGH — The Golden LEAF Foundation stopped funding equestrian parks this year, at least temporarily, but instead it found several other tourism-related projects in North Carolina worthy of support in its annual round of grants. The foundation’s board determined that more than $1.5 million should assist community plans to develop local tourist attractions. It funded several off-the-beaten-path projects, including $135,000 to aid Jackson County in “the transformation of the closed…landfill into a regional center for the growth of the arts and crafts community, the local agriculture and native botanical industry, and heritage tourism based on the region’s long history of craft excellence.”
(12.18.04) The DC Deal Breaker
What everyone assumed was a done $584 million deal to bring Major League Baseball back to the District of Columbia is now in flux over one little change. One city official had the courage to ask that some private money be used for the project.
(12.10.04) Lawsuit Could Nix Dell Incentives
RALEIGH — If a 6th U.S. Circuit Court of Appeals decision that disallows certain Ohio tax breaks withstands possible Supreme Court scrutiny, incentives such as those offered by North Carolina to Dell Corp. would likely be struck down as well, according to a law professor involved in the case. Peter Enrich successfully led the lawsuit on behalf of taxpayers and three small businesses against DaimlerChrysler, the State of Ohio, and the City of Toledo. He argued that the tax incentives violated the interstate commerce clause of the US Constitution. On Thursday, he compared the Ohio deal to the tax credits offered to Dell to locate a plant in the Triad.
(12.09.04) Bowling for Dollars
With the Tire Bowl in Charlotte just a few weeks away, questions arise about the possible need for public money to help keep the game going in the future.
(12.08.04) Bid for Passenger Air Service Fails
HICKORY — Hickory’s second attempt at offering incentives to attract airline service to the city has failed. The carrier that Hickory had reached a tentative agreement with in May, Southeast Airlines, ceased operations Tuesday before flights to the city could begin. Under the tentative agreement, Hickory would have provided $450,000 toward advertising, to pay customer-service and ramp staff to handle the flights, and pay for infrastructure improvements at the airport. Southeast would have flown to St. Petersburg, Fla. from Hickory. City officials were hopeful that the airline might have added other destinations in the future.
(12.06.04) How Tax Credits Become Subsidies
Spirited debate continues about the legality and economics of North Carolina business incentives. One argument merits rebuttal: that selective tax credits aren’t really government subsidies.
(12.02.04) Studies Question Incentives, Stadiums
RALEIGH — Many cities use tax incentives and other gimmicks to attract large companies with the hope of spurring economic growth. However, a recent study indicates that these large firms may not boost growth, and in fact, may merely displace other businesses. Similarly, advocates of sports subsidies claim that tax-funded stadiums benefit communities by providing jobs and attracting sales revenue from out-of-towners. Numerous studies show that public benefits have not materialized. One found that in 12 metro areas, sports-team venues did not contribute to net employment. Another concluded found that pro sports franchises had no effect on income growth.
(11.23.04) Top Lawyers to Discuss Incentives
RALEIGH — The newly formed NC Institute for Constitutional Law will sponsor a program Dec. 9 in Raleigh that analyzes recent court decisions on economic development. The program will feature Northeastern University law professor Peter Enrich, who was the lead plaintiff’s lawyer in Cuno v DaimlerChrysler, in which a three-judge federal appeals panel ruled that an investment tax credit that Ohio granted the automaker, in exchange for agreeing to build a plant in Toledo, violated the U.S. Constitution’s interstate commerce clause. Other panelists include Bert Gall of the Institute for Justice, Bill Maready, and Ernie Pearson of Sanford Holshouser.
(11.21.04) Performance Anxiety
Charlotte ranks in the middle of the pack according to a new study of high performing U.S. cities. By cultivating risk taking, Charlotte can improve on that.
(11.06.04) Black and White and Wrong All Over
Far from bringing high paying, high tech jobs to North Carolina, the $242 million incentive package offered to Dell would net computer assembly jobs that pay around $10 an hour. Worse still, Dell might have opted to come to N.C. without the package, we'll never know.
(11.04.04) The Uncertain Legality of Tax Credits
As members of the General Assembly come to Raleigh today to consider an incentives package to attract Dell Computers, they should keep in mind a new federal court case on tax credits.
(11.04.04) Dell Deal Oversold in Tennessee
RALEIGH — A special legislative session convenes today to vote on incentives to entice Dell Computer to build a plant in the Triad. But a similar incentives deal struck five years ago in Tennessee was sold to the public by exaggerating the benefits and underestimating the costs of incentives for a Dell plant. The difference between the initial, pro-incentives study and a later review was that the first one didn’t include indirect costs such as educating the children of Dell employees who are newcomers and providing those families with city services.” Because of tax rebates, these costs were covered not by Dell but by other companies and taxpayers in the area.
(10.08.04) Bill Targets Incentives Conflicts
RALEIGH — State Rep. Paul Luebke, D-Durham, introduced a bill last year that would prohibit consultants who advise the state on economic incentive programs to advise businesses on how to obtain incentives under those programs. Luebke developed the bill after Carolina Journal reported that accounting firm Ernst & Young advised officials in the Department of Commerce on the structure of its economic incentives, then represented Time Warner as the cable giant sought to obtain the new tax breaks offered by the state. “In my judgment, making money from both sides of the street is a conflict of interest,” Luebke said.
(10.01.04) Master of the Domain
The Supreme Court will hear a case on just how and when local government can use the power of eminent domain. Some states say it can be used any time there is money to be made of taking some private property from one owner and giving to another.
(9.22.04) Six Simple Tools for Cutting Your Taxes
It is apparent that North Carolina's tax burden is a major issue in the 2004 elections. Here are some basic principles policymakers should follow in reforming and reducing taxes.
(9.16.04) Caution Urged on Constitution Changes
RALEIGH — Robert Orr, executive director of the newly established North Carolina Institute for Constitutional Law, told the Asheville Board of Realtors last week to proceed cautiously in considering whether to support proposed changes to the state constitution. Orr, who retired recently as a N.C. Supreme Court justice, urged the audience to pay close attention to Amendment One on the November ballot. The proposed amendment would grant local governments authority to issue bonds to pay for public improvements associated with private development projects. Voters have rejected similar proposed constitutional amendments twice before.
(9.10.04) First Shoe Drops on Incentives
With a federal appeals court decision in Ohio, the proverbial first shoe has dropped on state tax incentives for economic development — taking away an excuse not to act against them.
(9.07.04) Air Service Shrinking to NC Cities
CHARLOTTE — In 1998, 14 NC communities had scheduled airline service. Today it is only nine. Even that figure may be reduced in the future, as recent trends in the airline industry make it increasingly difficult for smaller communities to maintain meaningful air service even if incentives are aggressively used. Since deregulation, the U.S. airline industry has been largely dominated by “legacy” carriers, such as American, Delta, and US Airways, that use a complex array of fares in an attempt to maximize revenues. They also operate mainly hub-based systems. But low-cost carriers are eroding the stability of this business model, in turn affecting service to smaller communities.
(9.03.04) Federal Court Throws Out Incentives
RALEIGH — A federal appeals court ruled Thursday that economic development incentives given by the State of Ohio to automobile manufacturer DaimlerChrysler violated the interstate Commerce Clause of the US Constitution. A three-judge panel of the U.S. Sixth District Court of Appeals determined that Ohio’s investment tax credit “is to encourage further investment in-state at the expense of development in other states, and the result is to hinder free trade among the states.” Robert Orr, a former state Supreme Court justice who leads the new North Carolina Institute for Constitutional Law, called the decision “very important” and “ a step in the right direction.”
(9.01.04) The Profligate Precedent
Development subsidies pick up in Charlotte, ignoring market signals to go slow.
(8.30.04) Thanks Goodness for Small Victories
There's still going to be a significant public subsidy for a new convention center, but some prudent opposition by county commissioners saved local taxpayers $9.4 million.
(8.27.04) This Land is Our Land
The Raleigh News & Observer is sounding the alarm about a commission to sell state-owned land. But they apparently have little concern about the state buying up private land.
(6.30.04) Jobs Announcement Draws Scrutiny
RALEIGH — Gov. Mike Easley announced at a Currituck County groundbreaking ceremony Friday that an automobile auction will expand its Virginia-based auto wholesale operation into North Carolina. The governor’s comments at the event and in a press release are inconsistent with other information uncovered by Carolina Journal. The discrepancies include the reason the company chose North Carolina, the influence of financial incentives, and the number of jobs for North Carolinians. The company pursued the North Carolina site only after a 2001 extortion scheme to secure a site in Suffolk, Va. had failed.
(6.24.04) Lobbyist Calls Legislator “Nutcase”
RALEIGH — An administrator for a taxpayer-supported association characterized Rep. John Rhodes, who has asked State Auditor Ralph Campbell to investigate a state-funded economic development agency, as a “true nutcase” whose only allies “are the very religious right folks.” Meredith Norris, a former aide to House Speaker Jim Black, now is a registered lobbyist for the NC Partnership for Economic Development, an association for the state’s seven regional economic development partnerships. Norris made her “nutcase” comment in an e-mail exchange with an official and a consultant with North Carolina’s Northeast Partnership. She later expressed regret about the statement.
(6.16.04) The Legislature’s Special Week
The House upped the ante on a Senate borrowing plan earlier this week, so then it was the Senate's turn to up the ante on a subsidy giveaway to the politically connected.
(6.14.04) Credit to the Supreme Court
The nation's high court just handed down a decision that gives school-choice foes some hope. But few have noticed that targeted tax breaks for business may be affected.
(6.08.04) No Incentives from Competing States
RALEIGH — When Harris Microwave Communications Division President Guy Campbell announced Thursday that his company will relocate its headquarters from Northern California to Durham, he said North Carolina’s offer of incentives won out over Florida and Texas in a “competitive” process. But while North Carolina offered a package of up to $4 million in withholding-tax rebates to Harris, it turns out that Florida and Texas decided to forfeit instead of play the incentives game. North Carolina’s Economic Investment Committee awarded the grant June 3. Long before then, however, Harris Microwave had identified its location in Durham as its corporate headquarters.
(6.04.04) Did Jobs Grant Clinch Relocation?
RALEIGH — Harris Microwave Communications Division, the latest beneficiary of tax rebates through North Carolina’s Job Development Investment Program, was granted up to $4 million in incentives Thursday for relocating its headquarters from Redwood Shores, Calif. But at the time the state Economic Investment Committee awarded the grant yesterday morning, the communications-equipment company had long prior already identified its location in Durham as its corporate headquarters, both verbally and on the web. Under the statute that created the program, incentives may only be granted to businesses that otherwise would not relocate to the state.
(5.27.04) Senate Panel Pulls Incentives Bill
RALEIGH — A bill that would expand funding and the number of projects that can be subsidized for economic development was tabled in a Senate Finance Committee meeting Tuesday. Both Democrat and Republican senators doubted the worth of the Job Development Investment Grant program in a lively debate. Some thought the legislation might have failed in a vote before its sponsor, GOP Sen. Fletcher Hartsell of Concord, asked that the bill be set aside. Current law allows the state to provide tax-rebate incentives for 15 businesses per year, with up to $10 million per year for the entire program. The new legislation would increase the potential number of projects to 25, at a cost of up to $18 million annually.
(5.21.04) House Easily Approves Incentives
RALEIGH — The North Carolina House Thursday tentatively approved another $20 million for the One North Carolina Fund, used to help seal economic development deals with businesses moving or expanding in the state. “We have to replenish this,” said Rep. Bill Owens, who sponsored the “emergency” legislation and warned that the state’s neighbors “would love to see us not pass this right now.” He claimed that without it, “we’re out of business.” The House supported the bill on a 99 to 14 vote, which came on the heels of a Carolina Journal report that large companies are now banding together to learn how to extract as much incentives money as possible from elected officials.
(5.20.04) On Milking A State’s “Cash Cow”
RALEIGH — A workshop conducted in late March, led by experts in getting economic development incentives from state and local governments, shows that large companies are now banding together to learn how to extract as much public money as possible from elected officials. The seminar taught dozens of corporate government-relations executives how to “Turn Your State Government Relations Department from a Money Pit into a Cash Cow.” It urged companies in part to “involve elected officials in press announcements;” to “thank everybody a zillion times;” and to “be mindful of the election and legislative cycle.” Two NC lawmakers criticized the presentation and what it signified.
(5.19.04) Ernst & Young Plays Both Sides
RALEIGH — Ernst & Young has become a player on both sides of incentives policy in North Carolina. The company established a cozy relationship with state officials through an incentives bill it helped create in 2001, the N.C. Economic Stimulus and Job Creation Act. The Department of Commerce hired Ernst & Young to study incentives in Southeastern states, and its findings were a significant contribution to the new bill. It was enacted into law in 2002. As the law was developed, Ernst & Young also advised Time Warner Inc. on how to extract incentives from the department, essentially working both ends of the issue.
(5.18.04) Hurry, Hurry, Hurry
On Monday night, millions of North Carolinians went to bed worried that the General Assembly would let another day go by without trying to spend millions of their dollars. They needn’t have worried.
(5.12.04) Broken Record on Biotechnology
News reporting confirms what has been said before in this space: biotechnology is a promising and exciting industry, but its economic-development impact is likely being hyped.
(5.03.04) This is Not a Parody
It's a story about subsidized entities asking for more subsidies for a profitable industry that's moving North Carolina business out of state. And it's true -- really.
(4.20.04) NC Lagging in Workforce Development
RALEIGH — A lack of education and vocational training has left North Carolina lagging in the competitive race of building a competent workforce to attract new corporations and businesses to the state. Community colleges leader Martin Lancaster said the system is doing its best to bridge the gap across the state through tech prep and other programs, but he thinks the state is on a collision course with disaster.“Forty-eight percent of recent high school graduates that enroll in community college need remediation in either reading, writing, or mathematics,” he said. “It’s a very bad sign that puts the North Carolina economic future at risk.”
(4.12.04) The Future of Biotechnology is (Not) Now
The political classes in North Carolina and many other states seem convinced that biotechnology is the Next Big Thing in economic development. Hope they don’t mind waiting in lines.
(4.06.04) The State’s Own Santa Clause
An incentives grant made by state officials last month may have violated a key clause of its authorizing legislation. And so the state's response is, essentially, so what?
(4.05.04) Jobs Grant May Have Skirted Law
RALEIGH — Gov. Mike Easley announced March 15 that officials had awarded a $7 million grant to Verizon Wireless and that the company would build a high-tech call center in Wilmington. Had he chosen to make the announcement at the company’s 17-acre building site in South Wilmington, he would have had to wear a hard hat and dodge bulldozers, because the project had already started. An investigation by Carolina Journal revealed that state officials might have violated state laws and guidelines in making the award. According to evidence found by CJ, the company had already committed to the site and had started the project before the state awarded the grant.
(3.23.04) Status of Boeing Records Disputed
RALEIGH — Carolina Journal’s attempt to gain access to records on the Boeing-GTP incentives began Dec. 19 with a phone call to the Commerce Department. One reason why the records weren’t released for nearly two months was that officials asserted some of the records constituted trade secrets that were exempt from the public records law. “The secret treatment given to economic development meetings and records in North Carolina is as restrictive as anywhere in the country,” said one attorney, noting that the increasing use of economic incentives will exacerbate the debate over openness in government.
(3.22.04) Post-Boeing, Incentives Debate Rages
RALEIGH — No matter how NC slices them, “targeted economic incentives” — such as the $534 million package offered to Boeing to start a new plant at the Global TransPark — discriminate against firms already in the state, both supporters and opponents of the inducements say. But they disagree on what can be done to solve the problem. “You’ve got to be competitive,” said a supportive lawmaker. “If we don’t provide jobs for our people, we’re lost.” But opponents say other policies, especially across-the-board relief for small businesses, would create more jobs.
(2.27.04) Taking State Politicians to Court
The new NC Institute for Constitutional Law will allow citizens who have been wronged by government action an effective way to take their case to court.
(2.22.04) Separate but Equal -- On Economic Development
The February cover story of Carolina Journal provided evidence of a conflict between economic-development policy and the NC constitution.
(2.20.04) Report: NC Not Low in Business Taxes
RALEIGH — A study released several weeks ago by an accounting firm and recently touted by North Carolina politicians as evidence of the state’s attractiveness to business is fundamentally flawed and offers little useful information to policymakers considering tax changes, according to a new report published today by the John Locke Foundation. Small businesses, Cordato wrote, are particularly affected by the taxes left out of the study, and account for about half of employment in North Carolina and have generated 80 percent of net job growth in recent years.
(2.20.04) Real Story on NC Business Taxes
A new “study” from Ernst & Young shows North Carolina to have one of the lowest business-tax burdens in the country, say politicians. Uh, no.
(2.18.04) State Offered Boeing $534M at GTP
RALEIGH — North Carolina offered Boeing more than $534 million — “probably” the state’s largest incentives package, officials said — if the aircraft manufacturer would build its new 7E7 jetliner at the Global TransPark in Kinston. Information about the state’s 20-year proposal was released Monday by the Commerce Department after Carolina Journal prepared to file a lawsuit and other newspapers requested documents about the package. Included in North Carolina’s incentives were 539 acres of land, valued at $10.8 million, and $280 million in tax-exempt bonds for a building provided by the state and “a third party.”
(2.11.04) But We Have a Five-Year Plan!
The NC economy is facing some serious challenges. That's why it should be so reassuring that state politicians have now fashioned a five-year plan to fix things.
(2.02.04) Biotech Failure Blamed on State
RALEIGH — State officials botched the recruitment of a biotechnology company because of a power struggle between the Department of Commerce and an economic development agency in northeast North Carolina, officials of the company say. Documents also show that rather than helping the company in negotiations, North Carolina’s Northeast Partnership continued a practice of seeking equity in the companies it recruits. Senate President Pro Tem Marc Basnight appears to wield strong influence over the Partnership, sometimes determining whether and how businesses get state incentives.
(2.02.04) Role of Regional Partnerships, Basnight Questioned
RALEIGH — Fragmentation of leadership and responsibilities has diminished the effectiveness of North Carolina’s publicly funded economic development agencies, says a private developer who once had dealings in the northeast area of the state. The developer said "that region is controlled by [Senate President Pro Tem Marc] Basnight and by R.V. Owens (III)." Owens is Basnight’s nephew, chief fund-raiser, and a powerful influence in the Northeast. "Everybody has to stay in line and stay in step," the developer said, "or there are negative ramifications held over their heads."
(2.02.04) Partnership Seeks Grant for CropTech Costs
RALEIGH -- In early May 2002 Ernie Pearson, the N.C. Northeast Partnership lawyer, informed Rick Watson about legal expenses from the CropTech deal, including costs "to assist in overcoming concerns raised by Commerce Secretary Jim Fain and to finalize the [agreement]." Watson also requested that Pearson bill the Northeast Partnership for future services related to the deal, though it never went through. Watson sought Tobacco Trust Fund funds to cover these tens of thousands of dollars in cost.
(2.02.04) Executive: Basnight Had "Key" To Tobacco Funds
RALEIGH — CropTech Corporation, which negotiated with NC for more than a year in an effort to relocate to the state, instead decided to move to South Carolina in May 2002. A company official blames the time spent dealing with NC for draining its finances, leading to bankruptcy. "We were told there was no one more powerful in the state of North Carolina than Senator Basnight," he said. "It was understood that this was an exceptional situation because of the involvement of the Tobacco Trust, and Senator Basnight had the key to that resource. His key to opening that door was accommodating his interests — that’s what we were led to believe."
(1.21.04) State Reclassifies Counties Under Lee Act
RALEIGH — The N.C. Department of Commerce on Friday changed tier designations, which determine access to state economic-development funding, for 19 counties. Burke, Caldwell, Caswell, Catawba, Cleveland, Harnett, Pender, Stokes, Surry, and Yancey counties moved down one tier level to a more-distressed designation. Beaufort, Cumberland, Duplin, Lenoir, Martin, Onslow, Vance and Wilson counties all moved up one tier to a less-distressed ranking. Hertford County moved up two tiers.
(12.22.03) Boeing Offer Was At least $93M
RALEIGH — North Carolina offered Boeing at least $93 million in incentives to build the aircraft company’s proposed 7E7 Dreamliner at the Global TransPark in Kinston, a state Commerce Department official said Friday. The incentives, offered under the William S. Lee economic development act, included estimated tax credits of $65 million and $28 million for a job development investment grant. The grant carried a requirement that Boeing provide 1,200 jobs if the company built its plant at Kinston.
(12.12.03) Incentive Vote to Have Repercussions
In a few hours meeting in special session, members of the North Carolina legislature gave huge subsidies to corporations, widened regional and sectional rifts, and introduced a real issue into the 2004 governor's race.
(12.11.03) The Case Against Panic Is Strong
Politicians almost always make bad decisions when they or their loudest constituents feel panicky. It's time to separate the rational fears from the irrational ones.
(12.08.03) Now, About Those Incentives. . .
Targeted tax breaks, government subsidies, and other incentive policies are flawed. But one idea expected to get a hearing during the upcoming special session is a good one.
(12.07.03) In Search of a Biotech Bonanza
North Carolina is hot in pursuit of Massachusetts' status as a hotspot for biotechnology startups. So is this a contest of marketing pitches, or something more?
(12.03.03) So What If It Is Unconstitutional?
The General Assembly is preparing to hold a special session next week to discuss incentive deals for specific corporations. This should be considered illegal, but it won't be.
(11.18.03) North Carolina Is No. 1, Again!
The latest ranking of business climates by Site Selection magazine again has North Carolina at the number-one spot. Here's what that really proves.
(9.28.03) No. 705: Exploding the Myth of Low-Paying Service Jobs
It is not true that jobs in the growing service sector of North Carolina's economy pay less than those in manufacturing.
(8.25.03) Choosing Your Poison on Incentives
Assume for the sake of argument that state government should use targeted incentives to improve North Carolina's economy. Should the tool of choice be tax credits or cash?
(8.18.03) Businesses: Credits Not Decisive
RALEIGH — A second Commerce Department report on the William S. Lee Act released in as many weeks indicates that 95 percent of the time targeted tax credits are not a “deciding factor” for companies when they make investments or hire workers. The department’s newest report was based on a survey of North Carolina manufacturers. “This report indicates for the majority of firms the Lee Act is not effective. We are simply wasting taxpayer dollars. This points to the necessity of major reform sooner rather than later,” said Rep. Paul Luebke, D-Durham, a frequent critic of the Lee Act.
(8.13.03) Incentives Lawsuit Is Dismissed
RALEIGH—A lawsuit filed by a legal association against the state that maintained that offering tax rebate incentives to film companies violates the “public purpose” requirement in the North Carolina Constitution was dismissed Monday in Wake County Superior Court. Judge Narley Cashwell sided with lawyers representing the state, who argued that the N.C. Institute for Justice’s case was moot and the plaintiffs lacked standing. “I don’t think this is a particularly significant setback,” said a lawyer for IJ.
(8.08.03) Lawmaker: Lee Act ‘Colossal Failure’
RALEIGH — A new report on the William S. Lee Act shows that 96 percent of the jobs associated with the act would have been created anyway – without the incentives authorized by the legislation. The report, released Thursday by the North Carolina Department of Commerce, was prepared by Michael I. Luger, director of the Office of Economic Development for the Kenan Institute of Private Enterprise at UNC-Chapel Hill. The report was prepared for the N.C. Department of Commerce in response to legislation in 1996 requiring a biennial assessment of the program.
(8.08.03) Another Round of Promises & Pork
North Carolinians have also had more than their share of false promises and costly political boondoggles. And now it's happening again, with biotechnology.
(7.25.03) State Makes Second Incentives Grant
RALEIGH—The Economic Investment Committee has awarded a grant to the R.H. Donnelley Corporation to relocate its headquarters to the Triangle area of North Carolina. Under the agreement, the state will provide the company with a reimbursement of 65 percent of personal state withholding taxes for up to10 years. About 140 of its employees are expected to move to North Carolina in early 2004. The North Carolina grant could be as much as $4.3 million if the company creates all the promised new jobs over 10 years.
(7.10.03) Picking Up Pieces of Sky
Responding to the Easley administration's allegation of being a "Chicken Little" on the NC economy means picking up a lot of pieces of sky that must have fallen from somewhere.
(7.07.03) State Gives Company $1.2 Million
RALEIGH – Gov. Mike Easley said June 24 that Greensboro-based RF Micro Devices is the most recent beneficiary of the state’s One North Carolina Fund economic incentive. Easley’s statement in a press release didn’t mention that the circuit maker received incentives, but the Department of Commerce confirmed the company will receive $500,000 from the governor’s discretionary fund. The News & Record of Greensboro reported that the company “threatened that it might take the jobs to China without local tax breaks.”
(6.25.03) Tourism Measure Would Cost $600M
RALEIGH—The House Appropriations Committee endorsed a bill Thursday that would create a program to promote North Carolina and attract more visitors to the state. Under the proposal, a Travel and Tourism Grant Committee would award grants to the owners of qualified projects to create, renovate or further develop travel and tourism projects. But concerns were raised about the cost, feasibility, and actual economic impact. Over the next decade, the Travel and Tourism Investment Act is projected to cost about $600 million.
(6.13.03) NC's Not on the List
Amid all the evidence of North Carolina’s lackluster economic performance – the lowest growth rate in the region, the highest rate of job loss in the region, etc. – comes another indicator that speaks directly to the state’s bias against investment and enterprise.
(5.30.03) We Need a Tiff about TIFs
The state legislature is considering the idea, once again, of allowing localities to issue public debt without a public vote. Bad idea.
(5.19.03) Rip van Winkle, Round 2
The Easley administration didn't much like the suggestion that its tax policies were putting North Carolina's economy to sleep. But it's time for a wake-up call.
(5.16.03) Author Calls for New Strategy
RALEIGH — North Carolina needs a new partnership between the state and local governments to restart its economic engines and facilitate growth, an author and investment advisor said Monday at a John Locke Foundation luncheon. There has been too much emphasis on business incentives for companies that do not reinvest in North Carolina and who bring with them only low-wage jobs, said Tom Vass, president of the Corporate Investment Center. The state should develop small businesses, promote high-skill training, and create a new financial infrastructure in order to create self-sustaining economic growth, he said.
(5.09.03) "Rip Van Winkle State" is Returning
North Carolina's economy is performing worse than that of any other Southeastern state. With our high-tax policies, we're becoming the sleepiest state, again.
(4.09.03) Reports Show Worrying Tax Trends
RALEIGH — Two reports released today show how North Carolina’s tax burden is growing compared to other states and how this may be affecting economic recovery. In its 2003 projections of state and local tax burdens, the Tax Foundation ranked North Carolina 25th in the nation — representing a dramatic worsening of the state’s position. Simultaneously, the John Locke Foundation published a paper that found that North Carolina’s private-sector economy has grown more slowly than in the rest of the Southeast since Gov. Easley and the legislature raised taxes in 2001.
(3.21.03) Study Calls for Audit of Commerce Dept.
RALEIGH -- Researchers from the Kenan Institute of Private Enterprise at UNC-Chapel Hill released a report last week ordered by the legislature in September after some of them had questioned the value of the seven regional economic development partnerships in the state. One recommendation: audit the NC Department of Commerce.
(3.05.03) No. 656: State Policy Should Change With the Economy
North Carolina enjoys strong long-term economic health, but state policy should change with trends in the economy.
(1.17.03) Questions surround N.C. State's hotel and conference center
Before the Council of State's vote on North Carolina State University’s proposed hotel and conference center, university officials asked and received a delay in the vote. Chancellor Mary Anne Fox told media that she requested the delay not because university officials were counting votes, but because they had not done enough to answer council members’ questions, especially over the issue of private financing of the project.
(12.27.02) A New Plan for a New Economy
It's time for North Carolina to set in motion the public policies likely to generate the most economic growth in an Internet, high-tech economy. Lower taxes and less regulations would be a good start.
(11.27.02) Tax Problems Acknowledged
In late October the North Carolina Economic Development Board released its 2002 Economic Development Strategic Plan. The 57-page plan relies heavily on government-funded programs, but also draws attention to North Carolina’s high tax rates and overall tax burden, reports Don Carrington.
(11.26.02) No. 633: News of Manufacturing's Demise Premature
Despite common perception, manufacturing is alive and well in the United States and North Carolina.
(11.21.02) Study: Incentives Not a Priority
Paul Chesser reports that the use of economic incentives by governments as a tool for luring business and industry, but professor Dennis Rondinelli said recently that very little research has been done to measure the success of such enticements.
(11.18.02) Charlotte’s Culinary School Deal has Secret Ingredients
Don Carrington reveals that when Johnson & Wales University and Charlotte officials announced a new $82 million school for downtown Charlotte they said it was being subsidized by local tax dollars and private funds, but neglected to mention subsidies from the state which now appears to be in the neighborhood of $10 million.
(11.13.02) No. 628: The Fallacy of Business Incentives
North Carolina's new and costly business incentives program is a bad idea that is doomed to failure.
(10.30.02) Easley, Basnight Manipulate Golden LEAF, Papers Show
The Golden LEAF Foundation, which administers half of North Carolina’s share of the national tobacco settlement, claims to operate independent of political persuasion. But documents obtained by Carolina Journal suggest that Gov. Mike Easley and N.C. Senate President Pro Tem Marc Basnight wield significant influence over the nonprofit foundation, reports Paul Chesser.
(10.04.02) The Final Insult
Lawmakers have passed an indefensible program of corporate socialism – right after raising taxes on consumers and small businesses. It was the final insult in a year of outrages. Now voters have a responsibility to respond.