The Charlotte Observer

October 28, 1995

Business incentives legal, superior court judge rules

Taylor Batten, Staff Writer

Copyright © 1995, The Charlotte Observer

A Transylvania County judge has ruled that incentives to lure business are constitutional, further muddying the question of what local governments can and can't do to recruit companies.

Superior Court Judge Donald Bridges' decision contradicts a more heralded decision in August that declared such incentives unconstitutional. In that case, in which Winston-Salem lawyer William Maready sued Forsyth County, Superior Court Judge Julius Rousseau said such incentives violated the N.C. Constitution by using public money for private purposes.

The Maready decision set off speculation about local governments' ability to continue giving money, tax breaks and free services to attract companies to North Carolina.

The N.C. Supreme Court could announce as early as Friday whether it will hear the Maready case or force the parties to go through the regular, lengthy appeals process. Both sides in the Maready case have asked to bypass the appeals courts and go directly to the Supreme Court.

After the Transylvania ruling, ``This is a tie - one to one,'' Wallace Finlator, a lawyer who has advised state officials on the Maready case, said Friday. ``The Supreme Court will be breaking the tie in due course, and we hope soon.''

In the Transylvania case, David Cantrell sued the county southwest of Asheville over its use of public money. Judge Bridges ruled Thursday that county officials had acted constitutionally when they used public funds to buy and prepare an industrial park to attract business.

In a statement last month as part of the proceedings, Bridges said: ``Economic development, which logically results in an increase of jobs and an increased tax base, is a legitimate public purpose for which local governments may appropriate monies . . . even though particular benefit to individuals or corporations may incidentally result.''

Economic developers, gathered in Winston-Salem Friday for the fall meeting of the N.C. Economic Developers Association, said they had new hope for the Maready appeal, armed with the Transylvania ruling.

If the state Supreme Court agrees Friday to hear the Maready appeal, arguments could be presented by February and a decision rendered by early spring, officials said. Both parties in the Transylvania case hope they will be heard by the Supreme Court alongside Maready, said Don Schronce, director of economic development in Transylvania County.

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Copyright © 1995, The Charlotte Observer.

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