Crying wolf instead of creating a real economic development policy
Published March 21, 2015
by Chris Fitzsimon, NC Policy Watch and NC SPIN panelist, March 20, 2015.
North Carolina desperately needs a thorough, public and serious debate about economic development policy and the use of incentives to attract new jobs to the state.
No one really likes incentives but no one except a few ideologues on the Right actually believes the state would fare very well against other states if it unilaterally disarmed and ended all incentive programs for corporations looking to move here.
The questions ought to be what kind of incentives do we have, what kind of jobs do they help create, how much do they cost, how do we pay for them, and how do we make sure that the incentives come with the right strings attached so they are tied to the numbers of jobs created and improve local communities even if the jobs leave.
That debate isn’t happening in Raleigh. This week what we saw instead was the heated battle of words between the governor and the Senate leadership which entertained political pundits but did little to inform the public or advance the debate.
It’s not all the fault of the Senate leaders. The Independent Tribune reports that Commerce Secretary John Skvarla recently told a group of business leaders in Kannapolis that the state faces an emergency when it comes to economic development and that lawmakers must act quickly.
“We are closed for business right now in the state of North Carolina,” Skvarla said. “There are opportunities in the pipeline — that I can’t go into detail about — that we are going to lose if we don’t get back into the game. And they are opportunities that you will not be happy to learn after the fact that we lost.”
Maybe Skvarla is right, maybe North Carolina is about to lose projects if the General Assembly doesn’t immediately replenish the funding for the Job Development Investment Grant program—or JDIG—the state’s primary recruitment tool.
The problem is that we have heard that exact line before.
Former Commerce Secretary Sharon Decker told the N.C. Economic Development Board last August that the JDIG grant money would run out by October if something wasn’t done and that 30 projects with more than 10,000 jobs were at risk.
Decker wanted a special session back then to come up with more JDIG money. Gov. Pat McCrory declined to call the session because he didn’t have the votes to pass JDIG legislation.
Then last September Decker made more dire predictions about what would happen if lawmakers did not come back to Raleigh and replenish the JDIG fund.
McCrory declined again to call them into back into special session. And then there was McCrory himself saying in December that the General Assembly needed to approve an incentives bill the first two weeks of the session to make sure North Carolina didn’t lose more jobs.
The session is now three months old and no incentive bill has passed and it has been seven months since former Secretary Decker sounded the alarm that all was almost lost.
No one doubts the sincerity about economic development from Decker or Skvarla or McCrory for that matter. Whether you agree with their policy proposals or not, surely they all want more jobs in North Carolina.
But they don’t help their case for JDIG or any other incentive program by repeatedly claiming that the sky is falling and then sending out press releases about the jobs they have created.
Ultimately, the responsibility for creating an effective and accountable economic development strategy rests with Governor McCrory. And it’s also his job to explain it and sell it to the public and to use the powers of his office to convince lawmakers—whose leadership is from his own political party—to adopt it.
So far, he has been unable to do that.
March 21, 2015 at 6:23 pm
Frank Burns says:
There is no need for debate. We need jobs so that all citizens can have economic prosperity without being dependent on the government dole or non profits. We are in competition with other states that provide incentives, so we better do that as well.
March 23, 2015 at 6:37 pm
Norm Kelly says:
But do we follow or should we be leading?
Instead of pols trying to pick winners & losers in business, how about consumers pick winners & losers. If the state bribes a business to expand or move here, then tax payers are forced to support that business even if we don't want to. But if a business CHOOSES to move here because ALL of the environment, including a low tax rate & good schools, then don't we all benefit. Plus consumers get to decide if that business is worthy of winning. Plus the business actually contributes to the states' bottom line just like every other business in the state. Except every other business isn't penalized so the favored business can get a reward.
Changing our environment so we are not dependent on government handouts is leading. Following the pack isn't leading.
