Maready v. City of Winston-Salem, et al.
FOR SEVEN MONTHS through the fall of 1995 and into the winter of 1996, North
Carolina's industrial recruitment methods were in legal limbo. At issue
was whether certain city and county recruitment incentives served a "public
purpose," as the constitution required of any expenditure of public
funds. But the question had wider ramifications that impinged on the state's
use of incentives, as well.
William F. Maready,
a trial lawyer in Winston-Salem, NC, successfully argued
before a Superior Court judge that his city and the surrounding county
violated the state's constitution by giving
taxpayer money to private companies for such incentives as helping to
rent an office building and providing subsidized parking. The judge, ruling
in August 1995, also found that the statute authorizing local government
expenditures for economic development was impermissibly vague.
The judge's ruling involved only Winston-Salem and Forsythe County. Local
governments throughout the state, however, soon began to question their
own use of incentives. State officials
worried that if the ruling were upheld on appeal, other statutes governing
state-level expenditures for economic development might also be cast into
Businesses began to look elsewhere. Into the fall, state recruiters claimed
that the number of prospective projects had dwindled. Some site selection
firms were rumored to have taken North Carolina off their lists altogether
pending some final resolution of the issue.
Attention to the Maready Case eclipsed a similar case in another North
Carolina county. In late October 1995, a Superior Court judge ruled that
incentives to attract businesses were constitutional "further
muddying the waters," according to the Charlotte Observer.
The Maready case came before the state
Supreme Court in February 1996. In early March, the high
court overturned the lower court's ruling. The justices voted along
party lines - 5 Democrats in favor, 2 Republicans opposed - with the majority
supporting the notion that incentives "are directly aimed at furthering
the general economic welfare" and one of the minority castigating the
state for justifying its use of incentives because "all the states
are doing it."
| Case Home
| Out-Box |
Business as Usual?
"Now we can get back to the business
of going after jobs for our people," declared Gov. Jim Hunt upon
hearing of the ruling. But the question remained whether the business of
attracting business could ever be the same again.
The principal briefs and the amicus curiæ briefs are articulate and
persuasive in defense of their various positions. The body of writing spurred
by Maready's challenge makes clear that the legal issues surrounding incentives
are but one aspect of broader economic, social, and political considerations that frame policy discussions of industrial recruitment incentives.
NOTE: The briefs assembled for this case have been
abridged, when possible, to focus on those sections stressing policy issues beyond the
constitutional challenge posed by the case.
The KSG Case Program appreciates the efforts made by Mr. Maready, the Attorney
General of North Carolina, and the amici curiæ to supply documents
for this case.
- In support of Maready
- Maurice and Jane Sugar Law Center For Economic and Social Justice,
- Corporation For Enterprise Development,
- Calumet Project,
- Share the Wealth,
- Federation for Industrial Retention and Renewal, and
- Grassroots Policy Project
- In support of the State
Supreme Court's Decision, March 8, 1996
The Court Decides
- The Supreme Court's Decision
- Cutting corporate welfare in North Carolina, Marketplace radio broadcast, Apr. 11, 1996 (Length: 7:34)
- High Court rules in favor of incentives,
Greensboro News & Record, Mar. 9, 1996.
- Incentives ruled OK, The Charlotte
Observer, Mar. 9, 1996
allows business incentives, NandoNet, Mar. 9, 1996
- The Supreme Court Agrees to Hear the Case
- State Supreme Court reviews
case, Raleigh News & Observer, Feb. 17, 1996
- High Court tackles incentives,
Greensboro News & Record, Feb. 16, 1996
- If Maready wins (Editorial),
Raleigh News & Observer, Feb. 16, 1996
- Incentive suit has broad public
backing (Edit.), Greensboro News & Record, Feb. 15, 1996.
- Business incentives divide conservatives,
AP, February 12, 1996
- Court case threatens business
incentives, Raleigh News & Observer, Feb. 11, 1996
- Incentives are bribes (OpEd),
The Charlotte Observer, Nov. 19, 1995 (Editorial)
- Superior Court & Other
- Business incentives legal judge
rules, The Charlotte Observer, Oct. 28, 1995
- Incentives game - What's next
move?, The Charlotte Observer, Sep. 25, 1995
- Incentives have strong backing,
Greensboro News & Record, Aug. 17, 1995
- The incentives game (Editorial),
Greensboro News & Record, Aug. 12, 1995
- Business incentives under fire,
Raleigh News & Observer, May 30, 1995