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Bill SchwekeOne of  North Carolina’s most experienced and insightful economic development experts, retired CFED wonk and former Senior Fellow Bill Schweke, forwarded the following brief essay in response to the series in Raleigh’s News & Observer on North Carolina’s rather amazing generosity in dispensing tax breaks and other giveaways to businesses in the name of “economic development.”  

JUST SAY “NO”
By William Schweke

The more things change, the more they stay the same. The new series in Raleigh’s News & Observer (“The Missing Money”) provides a near perfect illustration of this adage in the field of taxes, subsidies, and business attraction.

Like most states desperate for new jobs during the Great Recession, the price tag for the state’s package of general tax loopholes and company-specific, tailored incentives has increased significantly, during the past few years, with very little pushback from critics.

Indeed, the debate has tended to be framed as follows: Read More

The N.C. Budget and Tax Center released a special report this morning that finds North Carolina’s economic development incentive programs could be made more effective through strategic public investments.

Due to high unemployment and a sluggish economic recovery, state leaders have lately been scrutinizing the effectiveness of the state’s economic development incentive programs in generating employment growth. These programs offer cash assistance to individual firms to induce investment and job creation in North Carolina.

The BTC report (“Mediated Incentives: Making North Carolina’s Economic Development Incentive Programs Work Better through Strategic Investments”) finds that the state’s incentive programs could be more effective at job creation if these subsidies were attached to strategic public investments in targeted, growing sectors of the state’s economy through a process called “mediation.” Read More

CNBC is in the process of unveiling its “Top States for Business 2012″ and once again, North Carolina ranks very high. This year, we’re fourth — down from last year’s ranking of third.

This is from David Bracken at Raleigh’s News & Observer:

“The Tar Heel state ranked highest in infrastructure and technology, workforce, technology and innovation and business friendliness. The state’s ranked lower in the health of its overall economy and its quality of life.”

Got that? We rank high, as always, when it comes to “business friendliness,” but lower when it comes to “quality of life.” In other words, the conservative “let’s copy Mississippi” approach to state  development (i.e. slashing taxes even further and reducing outlays for essential public structures like education, environmental protection and preservation, the arts and urban planning has been shown, yet again, to be sadly shortsighted.