by Paige Terryberry
Senior Analyst for Fiscal Policy, John Locke Foundation
According to the latest press release from the Governor’s press office, Governor Roy Cooper pledged $1.2 million in taxpayer dollars to a battery company for their expansion. If it is true that “demand is growing for clean energy components like batteries” as Gov. Cooper says, then why does this big company need subsidies from the state?
Corporate welfare actually harms the state for many reasons. Ultimately it is a diversion of taxpayer resources to politically favored companies and provides unfair advantages to companies with the best lobbyists. Politicians do not create jobs. Companies are drawn to North Carolina in part due to our low taxes. By 2030 we will be one of only three states that does not tax corporate income. Companies do not need incentives from the government to choose to settle or expand here.
Handouts to politically chosen companies waste taxpayer resources, often giving them to companies that would have come here anyway.
In 2021 alone, Gov. Cooper pledged $1.3 billion to corporations. With the latest handout to the battery company, 2022 pledges now total more than $445 million. Moreover, the vast majority of corporate giveaway funding has gone to the wealthiest counties, weakening political arguments for job creation as these are hardly going to the areas of greatest need.
Recent budget adjustments accelerated this misuse of taxpayer funds. The budget for this fiscal year added $876 million to a new, Economic Development Project Reserve, with a carveout specifically earmarked for a “transformative” electric vehicle project in Chatham County, likely referring to VinFast.
North Carolina welcomes businesses. But we don’t need more political ribbon-cutting ceremonies on the taxpayer’s dime.