I’m not a betting man, but if I were, I’d wager the South Forty that Gov. Mike Easley is about to veto that ill-considered $40 million over 10 years corporate welfare giveaway for Goodyear Tire & Rubber to stay in Fayetteville.
The governor’s staff isn’t saying, but the signal his office sent Wednesday afternoon could not be clearer. His office proposed legislation to be considered next year that will create incentives to keep major manufacturers in North Carolina.
That’s the same goal of the Goodyear giveaway bill approved so overwhelmingly by the legislature before it left town. But the Goodyear bill has some huge flaws. It’s aimed at just one company. It would pay the company to stay, rather than paying a company to bring jobs here. It would pay cash. It wouldn’t even require that the company maintain all the jobs it now has.
Easley’s new proposal would be available for more than one company, such as Bridgestone-Firestone in Wilson. It would offer tax incentives to stay if the company invested more money in North Carolina, if it paid wages 40 percent above the local average wage, and if it kept all the jobs it now has. Companies would be eligible for rebates of certain taxes related to their investment in North Carolina. The money would be a rebate on future taxes paid, rather than a grant from a pool of money.
This proposal probably won’t satisfy all the critics of incentives for recruiting companies, but it’s a sight better than giveaways to companies that won’t even maintain the current employment levels.
One more thing is clear: There has been talk among supporters of the bill that if the governor vetoes the Goodyear bill, there will be a legislative session to override the veto. So far the legislature has not overridden Easley’s vetoes of previous bills, and the proposed legislation – Easley’s staff calls it the “American Productivity and Competitiveness Act of North Carolina,” an awkward mouthful – is surely designed in part to head off an override vote or at least diminish support in the House and Senate. It will give the governor – and legislators, too – political cover.
Here’s a link to an Observer editorial, "Veto the outrages" last week urging the governor to veto the bill.
And here’s a link to the Goodyear bill.
And here’s a link to the governor’s announcement today.
Wednesday, August 29, 2007
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8 comments:
jack I would like to say that we need a CAR PLANT here in N.C. Most Toyota or Honda plants take at least 200 million incentive. I just toured the new HYUNDAI plant in Montgomery, Alabama and it was really exciting. If North Carolina doesnt get any better than it is with jobs , this YANKEES gone. Alabama has got four cars plants starting with Mercedes. Just one car plant can create 100,000 jobs; I know it did in my town of Marysville , Ohio. North Carolina is fighting amongst itself to economically survive and I have been here five years and still no car plant. As many as, six car plants I know of have been issued and I have the data and location. Jack in parting I will say Hyundai cant get enough workers to fill the plant because of to many car plants, can you imagine Alabama with only 4.5 million People and we have 9.5 million People and if they would have brought that plant here! Shaaaaazzzzammm
Jack I would like to say that we need to focus on Automotive plants before the Government gives those away to the Chinese. Anything else the Government wants to heave ho off to the chinese let me know.
We call it giveaways. NOPE, it's a let them keep it scheme.
I think no business should pay any taxes. In essence they don't anyway. Any taxes they pay are added into the price of their product, which is finally paid by consumers.
So if we would eliminate all taxes on business, go to a sales tax, perhaps a Value Added Tax, business would find NC an exceptional place to be, and we couldn't keep them out.
As it is we pick and choose, making the playing field unlevel, subsidizing the politically connected.
Jack I am from OHIO and would like to try share with Southerners how we can attract more business; We have a payroll/income tax all over Ohio so that Business is relieved of the burden. Yes, we have to pay for our jobs and this method works.
Ashville, Raliegh and Charlotte should all have an small income tax; Every Illegal would then have to pay tax no matter what their status; This city income tax is used for roads, schools and job incentive; People who work in Charlotte and elsewhere are not paying in at all or paying their fair share. Jack Charlotte is growing faster than the infrastructure and we need Pay tolls roads like Florida or something to catch up. Either that or let the water out of the 'over flowing bath tub' and throw a car plant in WAKE county or in the outskirts of Greensboro. Then People can move over out of over crowded areas.
Charlotte is ready to explode with People and car plants need to placed in a strategic area to shift off all the over crowding; Our MARYSVILLE honda plant is 45 miles from the center of Columbus, Ohio . The nearest suburb is 27 miles from MARYSVILLE , OHIO and a new town has emerged from the FARMING town of Marysville.
Jack the State Government can also get Military contractors right here in North Carolina; If the Middle Eastern war were to stop today there will be 100 billion dollars worth of contracts for rebuild. North Carolina has the biggest bases and most soldiers coming out of the war and we could use some of this work. Back Ohio we had BMY a military truck compnay for 12 years at great a payscale and it shoved things along before the Honda plant came in.
I am writing to you about your editorial in the 9/2/2007 Charlotte Observer on NC House Bill 1761, otherwise know as “An act to create the job maintenance and capital development fund.” Although I agree with your well reasoned argument of the obvious – corporate welfare, only one company is eligible, etc. I suggest to you that the debate and your argument is misplaced.
This issue is not one of welfare for one corporation; rather it is an issue of the welfare everyone living in the interior portion of eastern North Carolina - those counties east of I-95 but not bordering the Atlantic Ocean.
Fayetteville, Wilson, and other eastern NC towns are not Charlotte or Raleigh. There is no driving economic force on which the residents of that part of our state can rely for jobs and economic well being.
Several years ago I attempted to fund a new business that would locate its technology operation in Wilson, my hometown. I attempted to “on-shore” business services that had been “off-shored.” The economics of occupancy and salary expenses in Wilson combined with the goodwill of on-shoring was
(and continues to be) a compelling business model.
Unfortunately I could find no appetite for any start-up technology investment in the eastern part of our state. The instant I mentioned technology in Eastern North Carolina, the resistance was overwhelming. One
advisor said “well if it has to be in the East I guess you could do it in Wilmington; but Costa Rica would be much better.” The perception of, and reluctance to do business in, the eastern part of our great state is creating a self-fulfilling prophecy.
It saddens me to see the downward spiral that is slowly overtaking this area. It saddens me even more because it is so subtle – it is indeed difficult to see something that is not happening.
Our responsibility as our brother’s keepers demands that we not stand by and watch a proud part of our state, populated by hard working people, continue
to be left behind. The question is not whether or not we give Goodyear $40 million to preserve some jobs in Fayetteville. The real question, and the one to which no on seems to be able to answer is: What do we do about all of Eastern North Carolina?
The insidious economic slowdown (that HB 1761 feebly, and perhaps even unknowingly attempts to address) puts North Carolina’s tax base at risk. As the demand for services from the East grows, the funds to supply those services will not come from local low wage jobs and buildings left vacant by
an unstopped, but hopefully not unstoppable, economic slowdown. Shifting tax dollars from fast growing areas like Charlotte and The Triangle to Lumberton, Tarboro, and Bertie County will only increase the tax burden on
all of us.
In July of this year, The Charlotte Observer highlighted some of the initiatives and experiments that UNC President Erskine Bowles has sponsored such as improving K-12 education and making college more accessible as keys to keeping North Carolina competitive. The article metaphorically suggested
that he saw The University as the “strongest engine to pull the state through the choppy waters of a new global economy.”
The situation in Eastern North Carolina is multidimensional and
unfortunately not solved with a single readily available solution like involved K-12 education and making college more available. Today that part of our state is, continuing with the Observer’s metaphor, idling a very rough idle. Even the educational infrastructure is wanting as a study by Jim Leutze found during North Carolina Wesleyan College’s attempt to join the UNC system. Leutze’s Study Group found that that “a significant portion
of the lowest-performing high schools in the state are in the Rocky Mount area" and that to attract students from surrounding counties, admission standards would need to be set "quite low." The study also reported that
"too few students in the area leave high school well prepared to pursue a college degree" – not exactly the environment to attract highly skilled, high paying jobs.
Assuming the resistance to private investment that I experienced continues, that the educational attainment highlighted by the Leutze Study continues to
lag, and that the out migration (probably of young and educated workers leaving to find jobs) continues, how does the eastern part of our state do anything but compete for $5 - $6 per hour jobs with Indochina and The Philippines? I fear more than choppy water is headed east – I fear that when we look back on this period in the history of Eastern North Carolina we
will see it was a tsunami.
With much respect, those initiatives, although commendable, will take years, perhaps decades, if ever, to manifest themselves in the interior portion of Eastern North. Overall, those counties are growing older, attaining
insufficient levels of education to compete in today’s sophisticated economy, and are experiencing continuing out-migration. Closing existing
plants, like Goodyear or Firestone, only exacerbates this situation. Should any single company receive government subsidies to continue operations in North Carolina? I don't know. What will it cost to replace the lost jobs? Probably more than to save existing jobs? There are no easy answers.
I suspect The University probably does indeed have the horsepower necessary to pull the state through choppy waters. Does it, or anyone else, have to horses to save Eastern North Carolina is what is worrying me - and I hope
worries you.
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