The N.C. General Assembly’s failure to put together a comprehensive economic development incentives program was a discouraging shortcoming to leaders longing for more industries and jobs. But some analysts look at North Carolina and say, “Be careful what you wish for.”
Incentives are a necessary evil, it would seem, but the dowry for marrying a great company with hundreds or even thousands of jobs is more expensive than ever. And there are no guarantees that such a marriage will be a happy one – for the company or the state that lands it.
An economic analyst at the University of Toronto wrote a column last week for the Los Angeles Times in which he detailed some of the huge incentives packages recently paid out to companies such as Tesla (in Nevada), Lockheed Martin (in California) and Boeing (in Washington state).
States like California and Texas are in it to win it -- whatever “it” is. They’re doling out billions of dollars to land blue-chip players. And as the University of Toronto analyst points out, there are plenty of question marks about how critical an incentives package really is to a company considering relocation. Far more important, some analysts say, are the quality of the local workforce and proximity to suppliers and markets.
Wilmington leaders, in particular, publicly worry and scold North Carolina legislators for failing to put together an incentives package to maintain a prosperous film industry. Other states – Georgia and Louisiana, to name a couple – already are putting together proposals designed to attract movies and television shows that North Carolina once seemed to have an inside track to land.
But the stakes are high, no matter who is in the game. California recently raised the value of incentives it offers the film industry from $100 million annually to $400 million. That’s a lot of public school teachers and law enforcement resources to hold onto movie sets and the prestige that comes with them.
When a neighboring state like South Carolina lands a BMW plant, North Carolina leaders understandably look with envy across the border.
But there are plenty of hidden costs that come with that prize.
