NC loses in high stakes incentives game

When we saw what Wisconsin bid to get a Foxconn electronics plant, we were blown away. So was this state’s incentive package. Foxconn – the Chinese company that makes iPhones and other electronic equipment – plans to build a $10 billion flat-screen factory in the United States. It will employ 13,000 people, most of whom will work on production lines. Average salary will top $50,000. It’s an economic development boon that just about any state would die for. Wisconsin, which has been plagued with fiscal shortfalls in recent years, just might. But for now, state leaders are thrilled that they landed this big deal.

Wisconsin worked out a $3 billion incentive package to lure Foxconn. Most of it is likely in “offsets to all taxes levied at the state and local level,” which the company requested in its invitation to bid on the project. The factory, which will make screens used in large televisions, interactive whiteboards and other similar devices, is slated to open in early 2020. Those jobs will give Wisconsin a great economic shot in the arm. But the individual incomes are about all the state ls likely to harvest. It appears it will have to do without the tax revenue that such a giant factory would produce.

And North Carolina’s bid? This state promised tax breaks and other incentives worth about $570 million. Foxconn officials visited North Carolina twice last May to do some scouting, but it’s clear why they went north. Wisconsin’s bid was more than five times bigger than ours. When the bottom line is the bottom line, that’s a pretty easy decision. And except for the state’s nasty winters, the quality of life in Wisconsin is easily as good as it is here.

Is North Carolina prepared to play at that level? We doubt it. Under long-ago Democrat-dominated government, this state wouldn’t go near South Carolina’s generous incentives that lured BMW and a host of other manufacturers to the Spartanburg-Greenville-Anderson area and transformed the economy and lifestyle of the state’s western region. The current Republican leadership in the General Assembly has shown even less willingness to toss generous incentives at big economic-development projects.

But unless that changes, we’ll assume that we’ll have just about zero change of luring Amazon’s second headquarters. The giant retailer says it will eventually have as many as 50,000 employees in its HQ2, making an average of $100,000 a year. That’s $5 billion a year in payroll alone that will flow into the city and state that Amazon chooses. It doesn’t begin to count the spinoffs and suppliers that will flock to the headquarters area, much as they did in South Carolina.

Yes, we do have a lot of the other things that the company wants – especially in the Triangle. But so do a dozen or more other American cities east of the Mississippi. And if the Foxconn deal is the new incentives standard, we don’t see North Carolina willing to play in that league. And we’re not sure that we should.

But still, it’s fun to dream about it.

- The Fayetteville Observer

http://www.jdnews.com/opinion/20170928/editorial-nc-loses-in-high-stakes-incentives-game