Yesterday’s big news at the state Legislative Building was that the state budget hole is now a gargantuan $4.7 billion for the coming year. April revenue numbers were down by a mind-blowing 40%.
So, what do the Governor and state Senate propose on the same day? Why, a big new corporate tax break that would throw a bunch of state money at a single, giant, multinational corporation, of course! (Apple Computers is the apparent target.)
That would be the same state Senate that just a couple of weeks ago unveiled a comprehensive tax reform plan that was devoted to closing tax loopholes so that all taxpayers would pay their fair share.
Now, before the link on that proposal is dry (or even fully spelled out) the Senate is backing up the state’s half-empty pick-up truck to dump gobs of cash on Apple in order to lure the company to western North Carolina.
In keeping with the mixed messages theme, the Senate sponsor, David Hoyle said the plan would only cost the state something like $1.5 million. But if that’s the case, why go to the trouble of springing the bill on everyone with little or no warning and no official fiscal note?
More to the point, if that’s all it will cost us, how in the heck could that make any real difference to a giant like Apple that probably spends more than that on Steve Jobs’ jeans? Hell, if that’s all it will take, let’s just give ’em the money out of the budget.
In reality, of course, this proposal is almost sure to be only the tip of a giant iceberg of giveaways a la the lavish gift baskets presented to Google and Dell a while back.
As for the substance of the proposal itself — which would cut the corporate income taxes for “capital intensive corporations” — it’s fairly complex. But make no mistake, it’s a giveaway that undermines long-established rules on how these calculations are supposed to be handled for multi-state corporations.
To read an exhaustive explanation, check out this report on the subject by one of the nation’s leading experts, Michael Mazerov of the Center on Budget and Policy Priorities.