by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
I write in Carolina Journal today on “Why incentives’ sway didn’t bring Apple our way.” Here’s one takeaway from that:
Further, as attested to by the Amazon and Apple decisions, having super-mega-incentives in place for “transformative” projects is unnecessary. Economic research suggests that big corporation relocations are made for long-term business reasons, not predicated on government incentives, which tend to be much less actual incentive than mere cherry on top. This means Apple chose Austin instead of Raleigh or RTP for business reasons, not for lack of incentives.
Does that mean Raleigh, RTP, or North Carolina at large is not attractive to business? Cut to the chase: North Carolina lost again, so does that mean we’re losers?
Not in the slightest. Losing out two huge, headline-hungry big corporations’ projects is no more an indicator of the overall health of the state’s economy than would be capturing those projects with monster incentives. Don’t forget: 99.6 percent of businesses in North Carolina are small businesses. What are we doing in terms of incentivizing them to relocate here, expand, and grow?
To incentivize the 0.4 percent here, we have to adopt economic development policies at the expense of the 99.6 percent. If we want to chase everyone, then we should adopt economic growth policies. …
Recent (and baffling) incentives expansions aside, in the last decade, North Carolina policymakers have adopted economic growth policies. We’ve witnessed impressive results from it. We’ve achieved the kind of economy any state wants to have. North Carolina’s leaders cut taxes, spending, and red tape, and now North Carolina is hailed by the Tax Foundation as a national model for tax reform. Last month Forbes named North Carolina the No. 1 state for business.