Lee Act moves toward new OK

By: - July 21, 2005 5:35 am

Raleigh News & Observer
Legislators want incentives for a Dole plant and the Cheesecake Factory

By DAN KANE, Staff Writer

Lawmakers in the state House and Senate pushed aside longstanding complaints about the William S. Lee Act on Tuesday so that two major businesses looking to expand in North Carolina could take advantage of its job-creation tax credits.

The nine-year-old act was to expire Dec. 31, and lawmakers were working on a revised economic incentives program this session.

But The Cheesecake Factory wants the act’s existing incentives as part of its planned bakery in Nash County, and Dole Food Co. wanted the act’s tax breaks as part of plans to build a plant in Gaston County to process fruit and vegetables.

The Cheesecake Factory bakery is expected to employ 500 by 2012, officials have said, while lawmakers said Dole could bring 3,000 jobs in the next five years.

"Folks, it’s all about the jobs," said Rep. Bill Owens, an Elizabeth City Democrat.

But opponents in the House said supporters had circumvented the Lee act reform effort in order to provide the tax breaks. Lawmakers stripped out an unrelated bill last week, replaced it with the Lee act extension, and did not run it by the House Finance Committee, which often approves legislation with tax implications.

"It should be an insult to the House," said Rep. Julia Howard, a Davie County Republican and a Finance co-chairwoman. "There has been no review, no oversight."

The act would provide $1.5 million in tax credits to the Cheesecake Factory, a California-based restaurant chain. It’s unclear how much Dole would receive in tax breaks.

Rep. Paul Luebke, a Durham Democrat and co-chairman of the Finance Committee, said the bill makes a mockery of development zones that had been meant to steer business to depressed inner-city areas.

"Somehow, through the rewrites of the bill, a development zone is now as large as an entire city, and the development zone for The Cheesecake Factory is out several miles from downtown Rocky Mount," Luebke said.

The legislation also extends the Job Development Investment Grant program for another two years. Rep. Paul Stam, an Apex Republican who also opposed the bill, said the extensions would provide businesses about $300 million in tax breaks over the next two years.

But a majority in the House supported the bill, 74 to 44, while only one senator, Ellie Kinnaird, a Carrboro Democrat, opposed it in the Senate. The bill still needs a second vote in the House, scheduled for today, for final approval.

After the vote, House Speaker Jim Black, a Mecklenburg County Democrat, said it was important to move the bill Tuesday so the state could successfully attract Dole.

"We just can not afford to lose these jobs in North Carolina," Black said.

He said he plans to meet with Dole’s CEO, David H. Murdock, today.

Black said lawmakers will continue their evaluation of the Lee act, which has come under fire for providing much of its tax relief to companies in counties with strong employment, and for providing help to companies that did not need it to relocate or expand in North Carolina.

Staff writer Dan Kane can be reached at 829-4861 or [email protected].

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Chris Fitzsimon

Chris Fitzsimon, Founder and Executive Director of N.C. Policy Watch, writes the Fitzsimon File, delivers a radio commentary broadcast on WRAL-FM and hosts "News and Views," a weekly radio news magazine that airs on multiple stations across North Carolina. [email protected] 919-861-2066