The Stanly News and Press (Albemarle, NC)

March 1, 2013

Unwinnable game now being played in Raleigh

By Scott Mooneyham for the SNAP
SNAP

Friday, March 1, 2013 — RALEIGH – A plank of the state Republican Party platform, adopted last June, reads that targeted tax incentives are “contrary to the free enterprise system” as other businesses “bear the full burden of taxation.”

About the time that GOP activists approved that platform, Gov. Pat McCrory was making the rounds on the campaign trail with some critical comments of his own about business recruiting incentives.

McCrory acknowledged that he would use them as governor, but “based on a return-on-investment formula for all businesses.”

His campaign literature sounded a bit more ominous.

“Upfront cash incentives for out-of-state companies with a hollow promise of jobs is not a sound economic policy,” a document on his campaign website read.

A couple of recent developments may test Republican resolve on incentives, and show that one’s perspective regarding them has a tendency to be influenced by where one is sitting, especially if that seat involves governance.

For a few weeks, Carolina Panthers owner Jerry Richardson has been meeting with legislative leaders and McCrory regarding taxpayer help to upgrade Bank of America stadium.

Richardson wants the state, in one form or fashion, to put $62 million toward the $250 million renovation. He also wants state lawmakers to approve a hike in the local prepared food tax in Charlotte in order to pick up a big chunk of the cost.

Richardson has said that he has no plans to move the team if the state doesn’t come through. Still, there is an obvious implication that could change down the road.

Legislative leaders say talks are “ongoing and productive.” I would guess that means they don’t consider the request “contrary to the free enterprise system.”

Meanwhile, North Carolina faces the prospect of more competition, in the form of lucrative incentives from South Carolina, for the film production businesses.

South Carolina lawmakers are considering legislation offering incentives for motion picture and TV production outfits that, in some cases, are richer than those offered in North Carolina.

Our southern neighbors are considering the legislation on the heels of a revival in the film production business in the Tar Heel state, coming after lawmakers here ramped up incentives a few years ago.

The machinations in South Carolina point to a conclusion that the incentives game is a never-ending cycle that carves more and more holes into the state’s revenue stream while benefiting only select industries.

It also explains why business recruiting incentives have come under attack from the right and the left.

Still, it is easy to criticize incentives policy when you are not one of the ones in a position of power and governance and will not be held accountable when jobs go elsewhere. (Yes, I am guilty as charged.)

Neither Republicans nor Democrats are going to unilaterally disarm and allow neighboring states to reap the benefits.

But if party planks and campaign talk are more than empty rhetoric, state leaders should be about trying to forge a national consensus to stop what is an unwinnable game where taxpayers are the ultimate losers.