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.
RALEIGH -- You can call it the Cult of the Next Big Thing, the belief that the key to transforming the economy of most any place is a single, massive project. The economic development equivalent, if you will, of a game-winning grand slam in the bottom of the ninth. And yet, these deals are typically something so simple that they can be reduced to a single word or phrase.
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.
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.
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.
Dr. Dennis Rondinelli believes that soaring costs and dubious benefits of corporate welfare, such as the Dell deal, will haunt North Carolina for years.
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."
The newly struck deal between Dell computers and the state of North Carolina should give us pause before celebration. Legislators approved $243 million in state tax breaks to Dell, while Forsyth County and Winston-Salem will add $37 million to the state’s offer, for a total of $280 million in "incentives."
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.
