Republican Gov. Pat McCrory is asking North Carolina lawmakers to increase funding for economic incentives, but the proposal is meeting resistance from conservatives.
According to The Daily Tar Heel, McCrory requested earlier this month that lawmakers approve funding for the Job Development Investment Grant program and One NC Fund “in a matter of weeks” in order to ensure that North Carolina remains competitive relative to states that have embraced business incentives. (RELATED: Corporate Welfare is Up 800 Percent in SC under Gov. Haley)
Graham Wilson, spokesman for the N.C. Department of Commerce, told The Daily Tar Heel that JDIG has been particularly effective, “bringing in 35 companies and creating 15,227 new jobs from February 2013 to the end of 2014.”
However, Raleigh resident Jeff Scribner, president of New York-based ASI Enterprises Inc, submitted a report to the legislature opposing business incentives, which he claims are a waste of resources that could be better spent on improving the lives of all residents.
“If your business climate is good, companies will come to your state without you having to bribe them,” he points out. “If you have a lousy business climate, you are going to have to bribe them to come.” (RELATED: McAuliffe Sets Record for Business Incentive Deals)
The Fayetteville Observer reported on Sunday that economic incentives will likely be among the “meatier issues” addressed by the legislature in 2015, as Republican legislative leaders seek to shift from the ambitious policies they pursued after taking control of both chambers in 2011 toward a “more normal agenda.”
However, Senate leader Phil Berger and House Speaker Tim Moore, both Republicans, said they could not be sure of the position their colleagues would take on economic incentives, because it remains very early in the 2015 session.
Adding to the uncertainty, conservative groups “are prepared to punish Republicans who try to walk a more moderate bent.” (RELATED: States May Have to Disclose Business Subsidy Costs)
Donald Bryson, president of the North Carolina chapter of Americans for Prosperity, told the Observer that his group “will call out GOP lawmakers back in their home districts who veer from fiscally conservative principles,” including those who support business incentives or expanding Medicaid.
Dr. Roy Cordato, in a newsletter for the John Locke Foundation, notes that opponents of economic incentives often deride them as “corporate welfare or simply cronyism,” but contends that, “the more intellectually correct, if less concise, description of what is being referred to is ‘state based central planning.'”
“In other words,” he writes, economic incentives “substitute the investment decisions of politicians and politically appointed bureaucrats for the investment decisions of market participants.”
“In North Carolina, no less than in the former Soviet Union,” he added, “legislators, bureaucrats, or secretaries of Commerce have no way of making anything but arbitrary decisions when it comes to allocating market resources,” because “they cannot possibly know how those resources would have been alternatively used if left to the free decision making of private sector owners.”
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