Businesses that demand state-financed economic perks to move to North Carolina would have to meet new disclosure requirements under a bill introduced in the General Assembly.
The measure, sponsored by Rep. Pryor Gibson, D-Anson, would mandate as part of the application process for economic incentives that businesses reveal negotiations with other jurisdictions for similar incentives deals.
The legislation, filed two weeks ago, also would require businesses to disclose the nature and value of each offer from a competing state. The bill would apply to incentives applications for infrastructure development, job maintenance and capital development, job development investment grants, and the One North Carolina Fund.
“Incentives are getting to be an extremely costly procedure for us. It’s incredible how much is being spent in the bidding war between the states,” said Rep. Phillip Frye, R-Avery, a cosponsor of the bill.
“As long as incentives are on the table, I will be voting for them, because jobs are that important to me,” he said. “But I am very willing to look at any bill that puts incentives packages up for debate.”
Gibson told The News & Observer of Raleigh the bill would ensure that North Carolina isn’t cheated on incentives deals. “We want to protect the state’s taxpayers against any slick operators. And one way of doing that is by making them reveal the other offers,” he said.
In addition to shining light on incentives offers, the bill directs the state to negotiate with other jurisdictions to create a model agreement cracking down on the use of incentives.
“The best interests of the State lie in changing the competitive environment so that economic development incentives play less of a role in addressing the State’s needs with respect to economic development,” the bill says.
Frye is willing to help coordinate efforts between North Carolina and neighboring states to create a level playing field and encourage cooperation on incentives.
“Maybe there are areas in the incentives package system we could agree to not participate in,” he said. “That would allow the money for incentives to go for all kinds of infrastructure needs — better roads, schools, and hospitals — that would help our small companies as well as the large ones.”
The bill is assigned to House Finance Committee, which Gibson cochairs.
Frye said he is anxious to see whether the bill attracts the attention of his fellow legislators during the short session.
“I hope it’s at least brought up in committee and debated,” he said.
North Carolina has brokered several high-profile incentives deals over the past few years. State and local officials in 2007 handed Google an incentives package that included property and real estate tax rebates in exchange for building a server farm in Caldwell County. In 2004, the state gave Dell Computer Corp. $242 million in tax breaks to build a manufacturing plant in the Triad.
David N. Bass is an associate editor of Carolina Journal.