For as long as he has been governor of North Carolina, Mike Easley has racked up jobs announcements almost at the same pace that he has accumulated campaign dollars for his re-election.
Since entering office in 2001, Easley has espoused: The One North Carolina Fund, which he uses to “close deals” with relocating or expanding businesses; and Job Development Investment Grants, which rebate to certain qualified companies up to 75 percent of their new employees’ income tax withholdings. Businesses that apply for JDIGs must state that if not for the grant, they would not relocate here.
With each press release announcing new jobs , Easley credits the two incentives for “creating” jobs or for bringing millions of dollars in “investment” to the state. As of this writing, he claims his taxpayer-financed gifts produced 12,000 jobs and $1 billion in investment from One North Carolina, and 6,000 jobs and $660 million in investment from JDIGs.
But statements in many of Easley’s announcements have proven false. Perhaps the most egregious recent example of the governor’s exaggeration was the case of Harris Microwave Communications Division, which will get up to $4 million in JDIG incentives to relocate its headquarters from Redwood Shores, Calif. to Durham. On the same day the JDIG was awarded, Harris President Guy Campbell said “the JDIG was a major factor in our decision to relocate our headquarters to North Carolina.”
A couple of easy checks on Campbell’s claim revealed evidence to the contrary. When I spoke to a switchboard operator at Harris’s parent company headquarters in Florida that day, she told me that the Durham location had been identified as the Microwave Division’s headquarters “for quite a while.” Supporting her contention was Harris Microwave’s website, which said the Microwave Division was “headquartered in Research Triangle Park, North Carolina.” Campbell also said earlier in the day that “we were looking in North Carolina, Texas, and Florida, and North Carolina did win,” the headquarters, according to the Triangle Business Journal.
Creating doubt was the fact that Campbell has lived in Cary for quite some time. I asked Campbell whether his residence led to his decision to locate the headquarters in Durham, and he replied, “Not at all. I would have gone to Florida or Texas.”
But checks with state incentives administrators in Florida and Texas showed that neither had heard about Harris Microwave’s relocation plans.
Checks with other “competing” states on recent Easley jobs announcements for three more companies — Jacob Holm Industries, Poppelmann, and Synthon Pharmaceuticals — came back with similar “we didn’t work with them” statements. Officials in Virginia, New York, Georgia, South Carolina, and Tennessee denied Easley’s claims that companies were allegedly considering relocation in their states.
According to spokeswoman Linda Weiner, the Department of Commerce “seeks information from companies… concerning other locations they may be considering for a project and the nature of benefits and incentives associated with them… and whether state assistance is needed for the project to go forward in North Carolina. If a company misrepresents the nature of a project, assistance provided to it may be revoked. It may also be worth noting that not every economic development project goes through [another] state’s central [economic development] agency.” But if there is genuine “competition” between states, isn’t a company going to explore each state’s incentives gatekeeper and get what they can?
Evidently if a company just tells North Carolina they might go elsewhere, whether its actions and statements show otherwise, they are eligible for incentives. With Easley’s re-election at stake, don’t expect the state to cancel these corporate welfare privileges anytime soon.