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Three counties get 56 percent of total incentive dollars

The money North Carolina spends on incentives to grow businesses and create jobs overwhelmingly favors the state’s most wealthy urban areas at the expense of the state’s most distressed—often rural—areas that need the most help, according to a report released yesterday by the Budget & Tax Center.

The state has five major incentive programs that were originally created to target business development resources to economically distressed and rural areas in the state. These programs are known as the OneNC Fund, the Job Development Investment Grant (JDIG), the Jobs Maintenance and Capital Fund, the Industrial Development Fund (IDF), and the IDF-Utility Fund. Unfortunately, the programs have not lived up to their promise and have invested more of these resources in the 20 wealthiest counties (designated Tier 3 counties by the Department of Commerce) than in the poorest 40 counties (designated Tier 1), the report finds.

Specifically, the report looks at the incentive awards made by these five programs from 2007 to 2013 and finds the following mismatches in investment:

North Carolina has awarded more than triple the amount of incentive dollars to projects in the wealthiest twenty counties than projects in the state’s 40 most distressed counties. If the state were truly targeting economic development resources to the regions that need it most, we would have spent more in the counties that are most distressed and need investment the most. Unfortunately, we see the opposite. The Department of Commerce has granted more than $840 million through its major incentive programs, and $592 million—more than 70 percent of the money—went to the state’s least distressed, Tier 3 counties.

The state‘s incentive projects promised to create or retain two jobs in the 20 wealthiest counties in the state for every one job promised to the 40 poorest counties. Given that the distressed Tier 1 counties are the most in need of jobs, effectively targeted incentive programs would attempt to deliver more jobs to these counties than to the wealthier Tier 3 counties. Yet the opposite is happening—the state has implemented incentive projects that promised to create almost 90,000 jobs in the state’s least distressed counties, more than double the 42,235 jobs promised to the most distressed Tier 1 counties.

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jobseconomyDon’t get us wrong; it’s almost always great whenever a new employer is creating jobs in North Carolina. And the phenomenon of politicians claiming credit for job creation is nothing new; everyone likes good news and wants to be around when it’s delivered.

That said, today’s press release from the office of Governor Pat McCrory announcing the expansion of a plastics manufacturer in Henderson County borders on the ridiculous. This is from the release:

“Governor Pat McCrory and N.C. Commerce Secretary Sharon Decker announced today that Elkamet Inc. is expanding its North Carolina manufacturing operations in Henderson County.  The company plans to create 20 new jobs and invest more than $2.5 million over the next three years in East Flat Rock…. Read More

12-3In case you missed it, the McCrory administration took yet another step in recent days to assure that the always opaque and ripe-for-corruption business of bestowing economic “incentives” (i.e. giveaways to corporations) becomes just a little bit more opaque and even more vulnerable to corrupt practices.

As many folks are already aware, McCrory and his Commerce Department Secretary, Sharon Decker, have been moving to privatize the Department’s business recruiting/incentives work for some time. The plan — not yet fully fleshed out because the General Assembly has yet to formally  sign off on the deal — is to fire a bunch of Commerce Department employees and then recreate and re-establish their functions in a publicly-funded, private nonprofit.  To make matters worse, the whole thing appears to be thoroughly infused with partisan politics as one of McCrory’s top fundraisers has been designated to serve on the board of the new nonprofit (the fundraiser, John Lassiter, finally resigned last week from his position on the renew North Carolina Foundation — a group that exists to generate pro-McCrory propaganda — after months of drum-banging Chris Fitzsimon).

The latest outrage, however, involves the hiring of the new nonprofit’s first executive director. Read More