Your July 24 editorial "Buffalo bonuses" acknowledged that economic development incentives have become imperative for North Carolina to compete with other states and countries, but argued that the General Assembly should follow through on its promise of incentive reform.
That process began last week, when the General Assembly established the first ever Oversight Committee on Economic Development. Its primary responsibility will be to offer recommendations on creating incentive packages that offer the most bang for North Carolina’s buck.
Nearly everyone in the economic development community agrees there’s always room for improvement. Unfortunately there is not a consensus on what those changes should be. So, rather than allow two of North Carolina’s primary economic development incentive programs to expire, the General Assembly wisely voted to renew them. That will provide the necessary time needed to tackle these complex issues and create an even stronger tool.
Finally, tax credits for new industry do not reduce the amount of tax revenues that were available to a community before a company comes to town. A new company is a catalyst for additional tax revenues. For example, the Department of Commerce believes the net gain in state taxes connected to Dell’s plant in the Triad will be more than $700 million over the next 20 years. If Dell didn’t come to town, the new state tax receipts would be $0, not $700 million, and society’s costs that the new jobs would have eliminated would continue.
Expanding investment in economic development is vital to our future. The General Assembly understood this when it voted to continue the William Lee Act and Job Development Investment grant for an additional two years.
Executive Director, N.C. Economic Developers Association
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