Try as I might, I can’t see the wisdom behind this proposed “transformative” projects expansion. I can’t. It’s terrible.
For as long as I can remember, governors have tried to land a big automaker or some other large, attention-grabbing corporate project. Legislators, too. They’ve been wanting to stick one somewhere in North Carolina like planting a flag on the moon. To them, it’s the big win, the mission accomplished, the declarative statement to the world that economically, we have arrived.
They’ve been chasing this for so long they’ve missed a rather important fact: we have arrived.
We’ve achieved the kind of economy a state wants to have. We’re at full employment. We don’t need to beg. We don’t need to sweeten the pot. We’re open to all kinds of industry, big or small. We certainly don’t need to chase desperately after any single corporate “savior,” because we don’t need rescue, let alone at these prices.
As I read the details of the proposal and hear what state and local policymakers are prepared to do to bring in Apple or the next large employer, I am staggered. They would:
- Dramatically lower the threshold to qualify for a “transformative” project award — from at least $4 billion in new investment to $1 billion
- Refund up to 90 percent of the “transformative” business’ withholdings associated with the new, eligible job positions
- Remove the cap on the per-position refund amount (which is currently $6,500)
- Extend the time a “transformative” business is eligible for these incentives from an already unthinkable 25 years up to 40 years
- Grant local property tax abatements for up to 30 years
- Pay their infrastructure (water, sewer, and rail access) and raid other state incentives funds (One North Carolina, Golden LEAF, etc.) for extra millions
What are they thinking?
What are Republicans in the General Assembly thinking? Under their leadership these past few years, North Carolina has become the model state for sound economic policies yielding strong economic growth. Republican majorities have cut personal and corporate income taxes, simplified tax rates to single flat rates for everyone, removed a lot of government red tape, while still letting state budget continue to grow, just within its means. They’ve been doing the right things the right way and getting results.
What happened? Why change? Is the allure of a vanity project that great? My goodness, for years Democrats and media have been on autopilot, attacking Republican tax policies as sweetheart deals for big corporate cronies funded on the backs of hard-working North Carolinians. It was flat wrong, an absurd caricature. But this transformative project nonsense would do just that.
This brings me to Gov. Roy Cooper and his administration. What is he thinking? His political foes suddenly choose to do for real the very thing he’s always accusing them of doing, and rather than blast out statewide I told you so’s he’s going to join them? This just days after publicly calling to stop a scheduled corporate tax cut to fund even higher teacher pay?
Isn’t Cooper known for moralizing against corporate tax cuts? He even equated them to a cult ritual. “We cannot sacrifice education at the altar of even more corporate tax cuts or giveaways that are mostly for the wealthiest.” Remember that one? So full of self-righteousness and pablum.
So why is he and his administration now so in favor of this wide-open, irresponsible, jaw-dropping special corporate tax treatment? Does Cooper think lower taxes for all businesses is evil, but do it just for one big business and it suddenly becomes the act of a saint?
Speaking of hypocrisy on taxes, Cooper has a surprising rival in Wake County commissioners. WRAL reports that the incentives package “includes 30 years of property tax abatements from Wake County” because the Apple people “want 30 years of stability.”
What are they thinking? They’ve raised property taxes on county residents for three years running, and they want to make it four. But now they want to give Apple 30 years of property tax abatements? That’s a full mortgage term for most people!
Apple wants “30 years of stability”? So do the rest of us! At this point, three years of property tax stability would give Wake County residents a little breathing room.
Is Wake County a stagnant backwater in such dire need of some employer, any employer, that it maybe should consider such an enormous concession, regardless of how frequently they’ve hit up longtime residents for more and more taxes? Absolutely not. It’s one of the fastest growing counties in the United States.
Wake County residents I’m sure will be happy to make room for Apple, but they shouldn’t have to cover Apple’s property taxes as their own taxes keep rising, let alone do so for 30 long years. Wake County’s leaders should tell Apple to come on in, but you can worry about stability like the rest of county property owners. I worry about the stability of county leaders who think this is a good idea.
Am I overreacting? I asked Edward Brent Lane, who is the Kenan Institute Fellow of Economic Strategy at the Frank H. Kenan Center of Private Enterprise at UNC-Chapel Hill’s Kenan-Flagler Business School. His reaction?
So we’re looking at policies to provide the richest incentives ever to be given to the U.S.’s richest companies to locate in N.C.’s richest counties to create jobs for highly skilled employees with the highest salaries and the most options, being subsidized by a statewide population with lower incomes and fewer opportunities. There is a strange strain of progressive economic policy being practiced in N.C. these days.
By all means, let’s welcome new employers to this fine state, but let’s greet them and treat them as equal to all the other employers. That’s what we do in a free, egalitarian society. Royal marriages are for people in funny hats overseas.