EconWar



Greensboro News & Record


August 12, 1995

The Incentives Game (Ed.)



Copyright © 1995, Greensboro News & Record




For a disadvantaged state, North Carolina does all right.

''People are worried all over the state. If all the incentives go away, then prospective companies go away and no jobs come.'' This was the reaction of a spokesman for the North Carolina Department of Commerce to Thursday's court decision striking down financial incentives for industrial recruitment. It shows how far removed from reality true believers sometimes get.

The lawsuit questioned whether giving tax dollars or special concessions to an industrial prospect qualifies a ''public purpose'' as required by the state constitution for the use of public funds. A trial judge in Winston-Salem has now ruled that it does not. Building streets and water and sewer systems is clearly putting tax dollars to public use. Improvements offered to some property owners, but not all, are in another category.

We'll have no definitive answer on where exactly the line should be drawn until after the state Supreme Court hears the Winston-Salem case on appeal. Meanwhile, the doomsayers ought to take a look around. They're right that some other states and localities go well beyond what North Carolina has been inclined to offer. But some of them have come to regret their enthusiasm. (Alabama may never recover from its good fortune in landing a Mercedes-Benz factory.) All the while, North Carolina has been booming.

Sure, we miss some hot prospects. In a competitive world you never win them all. Some companies are determined to squeeze you for every possible dollar in concessions. But the solid ones are not so short-sighted. They value good government, good schools, low labor costs, a clean environment and good transportation. So do our existing corporate citizens, the ones whose taxes may be converted into incentives to attract potential competitors.

One judge has reached a decision, but the incentives debate is far from over, and the hyperbole has only just begun.




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Copyright ©1995, Greensboro News & Record.


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