Business publication ranks N.C. first in the nation for business climate

A top publication for corporate real estate and expansion planning named North Carolina as tops in the country in terms of a friendly business climate.

Site Selection magazine pegged the Tar Heel State as No. 1 this year after it tied with Georgia in 2020. The magazine noted North Carolina’s low corporate tax rate and a slew of new projects and expansions, as capital investment accelerates in the state.

Chris Chung, CEO of the Economic Development Partnership of North Carolina, pointed out that the increased focus on working remotely during the COVID-19 pandemic likely benefits the state, given its lower taxes and a higher level of freedom than some Democratic-run metropolises.

“If you look where the mobile or remote workforce is focused coming out of the pandemic you can see why a state like North Carolina would be very attractive in terms of affordability and quality of life, health care, and education access,” Chung said. “If you look at what people are looking for in normal times, we appeal to that. Perhaps some people now are done with life in New York City or Chicago and D.C. in terms of congestion and high cost. If they don’t have to be living in those places and are empowered to work remotely, this is a very attractive option. North Carolina has the mix of qualities that would appeal to an individual who is seeking greener pastures post-pandemic.”

Sen. Todd Johnson, R-Union, co-chair of the Senate Commerce Committee, said, “Low taxes, low spending, and reasonable regulations ushered in a boom decade for North Carolina. When a formula is working, we should continue it, and that’s what North Carolina Republicans intend to do.”

Sen. Steve Jarvis, R-Davidson, echoed those comments, saying that as a small business owner it’s his goal to keep the state “an environment where businesses can thrive and families can work. It is clear that the policy of low taxes and incentivizing business is a strategy that succeeds. A friendly environment for business will help carry our state into a bright and prosperous future.”

Jon Sanders, senior fellow in regulatory studies for the John Locke Foundation, told Carolina Journal that while the ranking is positive, the study should also be taken with a grain of salt. Given that Site Selection is pro-business, its rankings give positive weight to states that hand out loads of economic incentives.

Sanders notes that these “can be impressive to big corporations looking to relocate, but for the economy as a whole is a net cost, not a benefit.” He argues that the incentives cause long-standing businesses to bear a disproportionate amount of the tax burden so that newcomers can get a lower tax rate to locate in the state.  

 “Gov. (Roy) Cooper has been extremely handy with multimillion-dollar handouts to big corporations while simultaneously demonizing tax cuts to small businesses and families,” Sanders said.

But Sanders noted that the magazine rightly picks up on the state’s adoption of “proven economy boosters” like lower regulations and taxes, educational infrastructure, and training programs. 

“Fortunately, the General Assembly seems committed to continuing to hold down the state’s regulatory and tax burdens,” he said. “Choosing to stop playing favorites with certain corporate cronies might not sound as impressive to big corporations playing the incentives game, but it would reinforce the good already being done for the state’s economy.”

This report follows earlier accolades for the state. CNBC ranked North Carolina No. 2 on its list of top states for business, and Lending Tree ranked North Carolina the top place in the U.S. to start a small business.