A report from the University of North Carolina Center for Competitive Economies argues that some incentives no longer create jobs and should be discontinued, reports the AP:
The study was based on the center’s review of tax returns and other state records for thousands of companies – documents the Legislature gave special permission for the UNC-Chapel Hill business school organization to examine.
“The incentives that worked well 10 years ago are not performing as well today and suggests that the portfolio should be reallocated to capture higher returns and changing (to) the types of incentives that we use,” center director Brent Lane told the Joint Select Committee on Economic Development Incentives.
North Carolina also should lower its corporate income tax rate from 6.9 percent to 6.5 percent so it will no longer be the highest rate in the Southeast, the report said. A UNC survey found that executives preferred the lower rate to targeted incentives.
The reduction would cost at least $56 million annually, but the report said that could be made up through the potential $574 million in savings between 2010 and 2015 if incentives previously under the state’s William S. Lee Act were eliminated rather than extended this year.
Triangle Business Journal reports that lawmakers are drafting a bill that would “cut the state?s corporate income tax rate and make fundamental changes in the tool bag of incentives the state uses to lure companies to North Carolina.”
