By Staff
It’s perhaps time to take a hard look at how North Carolina offers economic incentives for businesses that promise to relocate or expand.
The ball really got rolling under Gov. Jim Hunt. During his two terms in office, the state increased efforts to bring Japanese investment to North Carolina. More than 100 companies and tens of thousands of jobs were landed. Over a three-year period, the General Assembly’s investment of $12 million in the fund helped 55 companies create new jobs. That is compared to an $86 million incentive package provided by Virginia to Motorola, points out Dave Phillips, a former N.C. Secretary of Commerce.
But we think the focus has been blurred and North Carolina joined the arms race with other states willing to give away anything to land new jobs.
Currently, North Carolina is giving away millions of dollars, sometimes without any guarantee that an industry will expand or even hold the line and keep the current work force it does have.
Some blame the five-member Economic Investment Committee. It meets, often in secret, to dole out money — and it doesn’t become public until after the deal has been made.
Committee members argue that it needs to be that way.
Hobart, who will soon become Lt. Gov. Beverly Perdue’s chief of staff, said both the committee and the department are sensitive to the need to make the process as transparent as possible. But companies worried about tipping off rivals wouldn’t even consider North Carolina without some degree of secrecy, he said.
Then there are some deals that we might be better off not making.
In July, Honda announced that they are moving their jet engine headquarters to the City of Burlington and will provide “up to” 70 jobs. Unfortunately, each of those jobs will cost taxpayers at least $182,000, critics say.
The state is giving Honda $1.7 million in grant money and the Airport Authority in Alamance County is taking out an $11 million loan to make the airport suitable. The decision by Alamance officials is theirs to make, but the $1.7 million is yours and mine as state revenue.
Last week, the panel’s authority expanded with the General Assembly’s approval of up to $60 million for two tire companies. The Economic Investment Committee will oversee the grants, which could help Goodyear Tire and Rubber in Fayetteville and Bridgestone Firestone in Wilson expand their facilities.
It’s a valid fear.