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N.C. Commerce Secretary Sharon Decker says the $22.5 million fund to recruit business to the state is nearly empty, with enough money left to cover one additional jobs project, according to the Triangle Business Journal.

Decker was speaking to a group of commercial real estate developers at the Umstead Hotel in Cary when she made her comments about the state’s Job Development Investments Grants (JDIG) program.

Lawmakers did not fund the incentive program at levels desired by state commerce leaders, and Gov. Pat McCrory has said he is considering calling lawmakers back to Raleigh before their scheduled start in January for the long session.

From the TBJ article:

“And without JDIG, we will not be competitive,” N.C. Commerce Secretary Sharon Decker told members of Research Triangle chapter of NAIOP at its meeting Nov. 7 at the Umstead in Cary.

The JDIG program, since its inception in 2002, has been used by state economic development recruiters to sweeten the pot for companies that are considering a major investment in North Carolina that would lead to the creation of net new jobs in the state.

JDIG has typically been reserved for the largest new jobs deals, and pay-outs are only made after the company reaches a minimum job creation goal. Local companies that have been awarded JDIG grants include MetLife, Ipreo, Sygenta Biotechnology, Allscripts Healthcare and HCL Technologies.

Decker warns that the state is dangerously close to losing its chance to even negotiate on potentially large job-producing deals, including three big economic development prospects that are considering expansion and relocation options in the Triangle that could add another 4,100 jobs in region

You can read the entire article here.

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It was just a couple of weeks ago that the McCrory administration was up in arms and demanding blood as a result of a new and critical audit of the North Carolina Rural Center. Indeed, judging by their statements and actions then and since, you’d have thought the Rural Center had been revealed to be some kind of organized crime outfit.

Of course, the whole thing was a bit of an overreaction. As we noted at the time:

“Troubling as some of the reports from the audit are, the plain truth is that the main accusation is simply that the Center has been doing what Governors and Departments of Commerce of both parties have been doing for decades: promising that amazing job growth and economic development would result from their investments of state funds and then sometimes failing to deliver (or keep good track of whether they delivered).

That’s not to say we shouldn’t reform the Center, but to simply ax it overnight as State Budget Director Art Pope has apparently decided to do smacks of something more than simple good budgeting practices — namely a partisan effort by Pope and his cronies to punish a group that they’ve always hated, mostly because of their perception that it has always been staffed predominately by Democrats and maintained close ties to Democratic politicians.”

Now flash forward to today and the release of a new audit — also from the State Auditor. This one, however, is not directed at a group hated by some for its historic ties to Democrats, but at the Department of Commerce itself. Read More

NC Budget and Tax Center

Later today, Governor McCrory will announce his proposals to convert the Department of Commerce into a public private partnership that administers at least some of the state’s economic development programs.  North Carolina taxpayers should be concerned.

Although we won’t know the specifics of this privatization scheme until the Governor’s announcement, we do know from previous public statements that the plan will likely involve the creation of a nonprofit economic  development authority that receives financial support from both taxpayers and corporate donations in exchange for overseeing a range of activities related to industrial recruitment, existing industry support, and possibly small business development. This may also include administration of the state’s incentive programs—the Job Development Investment Grants (JDIGs), the OneNC Fund, and the Jobs Maintenance and Capital program for large employers.

Privatizing economic development isn’t new—a number of states have experimented with this approach over the past two decades, and the results are not encouraging. According to one recent report, states that have adopted public private partnerships for their economic development efforts have seen the misuse of taxpayer dollars, questionable incentive awards to failing companies, the appearance of pay-to-play incentive granting to those companies providing financial support to the partnership, and frequent lack of transparency and accountability with how the partnership spends taxpayer dollars.

And to top it all off, many of these partnerships haven’t proven to be very effective in generating the job creation results promised

Read More

NC Budget and Tax Center

The big news on the jobs front the past couple days has been the announcement by Governor Pat McCrory that insurance giant MetLife has agreed to make a new $126 million investment in two North Carolina locations, resulting in the creation of 2,600 jobs.

While the news of any job creation is good news when the state’s unemployment rate is over 9 percent, the price tag attached to these jobs is causing a bit of sticker shock. The deal involves providing $87 million in Job Development Investment Grant (JDIG) incentives to MetLife over the next 12 years—the largest discretionary incentive package North Carolina has ever offered from this program.

Given North Carolina’s tight state budget and persistently high unemployment, the public needs to know as much as possible about the real costs and benefits of the deal—and whether it’s really worth $87 million in taxpayer dollars, or about $33,000 per job.

To that end, here are three questions about the MetLife deal that need answers:

Question #1—How many jobs will go to North Carolina residents? While MetLife has promised to create 2,600 jobs, how many of these employment opportunities will be open to people already living in North Carolina, and how many will be filled by moving the company’s current employees from other locations in California and New England? At a cost of $33,000 per job, it’s hard to understand the justification behind simply providing taxpayer subsidies to cover the relocation expenses of out-of-state residents, unless the overwhelming majority of these new jobs can be filled with North Carolina residents.

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