More economic incentives debated in NC

While N.C. Gov. Pat McCrory is urging the legislature to replenish the state’s economic incentives fund, experts are continuing to debate the effectiveness of incentive programs in attracting businesses.

McCrory said earlier this month during an N.C. Department of Commerce luncheon that lawmakers need to fund incentives “in a matter of weeks,” according to The (Raleigh) News & Observer.

Graham Wilson, spokesman for the N.C. Department of Commerce, said the economic incentives are a tool that many states are using and are a way for North Carolina to remain competitive.

The main incentives programs in the state are the Job Development Investment Grant program and OneNC Fund. Wilson said the former program, known as JDIG, has been very helpful, bringing in 35 companies and creating 15,227 new jobs from February 2013 to the end of 2014.

Raleigh resident Jeff Scribner, president of New York-based ASI Enterprises Inc., wrote a report advocating against incentives and said the programs are a waste of time.

“If your business climate is good, companies will come to your state without you having to bribe them — they will just come. If you have a lousy business climate, you are going to have to bribe them to come,” he said.

To make the economy more attractive, he said the state should have less personal income and corporate taxes and better regulation. States like South Carolina have much lower taxes than North Carolina and are luring businesses away, he said.

He said North Carolina takes its biggest hit from the income tax.

Another aspect that businesses look at when deciding where to move is the state’s amenities, he added.

“N.C. has scored pretty well in terms of amenities such as the universities, which are all a plus and make (businesses) want to come here, but there are a lot of regulations and taxes, then they will look elsewhere with not-as-high taxes,” he said.

Allan Freyer, policy analyst at the left-leaning Budget & Tax Center, wrote in a May 2014 report that the money North Carolina spends on incentives creates jobs that overwhelmingly favor the state’s wealthy urban areas and not the rural areas — the areas that need the help the most.

Freyer wrote that Durham, Wake and Mecklenburg counties account for more than 56 percent of incentive dollars granted since 2007, with Mecklenburg receiving more than a third — totaling $303 million — of the entire $840 million given across the state.

“The state has offered joint JDIG-OneNC deals in the counties that least need it, resulting in higher costs to the state for the same number of jobs,” Freyer wrote.

Wilson said he can’t predict whether the state will replenish the incentives during the 2015 legislative session.

Though Scribner said he doesn’t think incentives are helpful, he thinks North Carolina’s business climate has room for improvement.

“Why does North Carolina have to bribe (companies) to come?” Scribner said. “We are better but not good enough.”

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