Spread the wealth

Published May 12, 2017

Editorial by Greensboro News-Record, May 12, 2017.

Erica Smith-Ingram grew up on a farm in eastern North Carolina, attended the N.C. School of Science and Math in Durham and earned an engineering degree at N.C. A&T. She went on to work for Boeing and the U.S. Patent and Trademark Office.

Then, in 2003, she returned to teach science and math in high school. Today, she lives in Northampton County and represents it and seven other small counties in the state Senate.

Every one of those counties lost population from 2010 through 2015. The trends are expected to continue, with one of them, Bertie, projected to lose another 26 percent of its population by 2035, according to North Carolina’s Office of State Budget and Management. All eight counties have unemployment rates higher than the state average.

In much of rural North Carolina, young people leave to find better opportunities, especially if they have the chance to go off to college. Smith-Ingram was no exception, until she decided in mid-career to return home.

But not everyone can go home to a good job. There aren’t enough companies to hire available workers or, after young people leave, there aren’t enough well-educated workers to attract new companies.

The state has tried to interrupt that cycle. Some bad ideas have included redistributing tax revenues from wealthier counties to poorer ones. The N.C. Senate recently advanced another effort in the form of a bill that would reserve more economic incentive money for struggling counties. Smith-Ingram, a Democrat, joined five Republicans as a co-sponsor of the legislation, which passed the Senate and awaits consideration in the House.

The measure sprang from a study of state economic incentive grants that found most of the funds go to Wake and Mecklenburg counties. In 2015, the Job Development Investment Grant program awarded $74 million to companies to help finance job creation, but none of that money went to a project in what the state calls a Tier One county, or most economically distressed.

“I was appalled by the study committee’s findings but not surprised,” Smith-Ingram said Tuesday.

There are three economic tiers, with 40 counties in each of the first two and 20 in the third, or highest. Guilford County slipped from Tier 3 in 2016 to Tier 2 this year. Tier 3 counties are considered the wealthiest, and they end up with most of the incentives awards. The state pays for the rich to get richer.

Two examples were seen this week. The state announced Tuesday that Credit Suisse will add 1,200 jobs in Wake County and can receive up to $40 million in JDIG grants. The next day, the financial firm AXA said it will add 550 jobs in Mecklenburg County. It will be eligible for nearly $12 million in JDIG funds.

Smith-Ingram said it’s no wonder “the same counties have persistently high poverty.” So, among other provisions, her bill would limit JDIG awards in Tier 3 counties to 50 percent of the statewide total.

“This will benefit a Guilford County, giving it access to 50 percent of the money,” she said.

Guilford County needs more jobs, but it isn’t losing population or distressed. For counties in those circumstances, incentives alone aren’t a magic formula.

“This is a start, but not enough,” Smith-Ingram said. Her counties need help to build a skilled workforce and infrastructure, including broadband internet service and better water systems. The state should invest in these communities and aggressively offer incentives for suitable companies to locate in rural counties and small towns.

Smith-Ingram’s district is fortunate to have her “back home,” but opportunities for other rural residents will be hard to come by without more state help.

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May 12, 2017 at 8:55 am
bruce stanley says:

I disagree that it was a bad idea to redistribute sales tax revenue from urban counties to rural counties. That was an even handed plan. This plan allows bureaucrats total subjectivity to pick winners and losers.

May 13, 2017 at 10:17 am
Norm Kelly says:

The alternative that is the most fair, least intrusive, and takes all gov't agencies OUT of the picture (which is where gov't always belongs!) but won't be considered by gov't hacks. Especially socialist, arch-left-wing zealot demoncrats. Cuz demons NEVER want to allow private sector initiatives a chance to see the light of day. If it ain't a gov't intervention, gov't control program there's not a single demon who will support it. Unfortunately, we have too many Republicans getting on the gov't gravy train with the big-gov't demons.

Of course, the alternative of which I write is the alternative of simply reducing ALL taxes and regulations. Make the playing field level for all citizens and businesses. Those who are already here as well as those that might choose to move or expand here. Instead of offering incentives for a business like the swiss credit company, why not let all businesses have a tax break. An incentive for one company or group simply creates a burden for another company or group. Every time an incentive is provided for swiss credit, the businesses in the county and state that were already here, already doing business, and already contemplating expanding must pick up the burden of the money gov't gave away. The money gov't gives away HAS to come from somewhere. And that somewhere is the wallets of the rest of the people doing business and paying taxes in the state. Incentives are just another example of gov't interfering with the normal economic engine that is the private sector. And demons HATE private business so much that they always want to restrict, control, limit, tax, regulate, and demonize it. Demons ALWAYS prefer a gov't entity over a private sector entity. Better for the gov't to provide health care to veterans than for private sector doctors/hospitals that already exist to provide service. Better for gov't to provide Internet service to rural areas, subsidized by those of us who pay for our own Internet service, than to allow private sector business to WANT to expand into rural areas. And how/why would private business WANT to expand into rural areas? Simple, but missed by left-wing zealots and big-gov't types. When private business is allowed to be where they want to be, where costs are reasonable, they will automatically expand in rural areas (cuz land is cheaper), and that will bring residents, and that will bring other services such as high-speed Internet. All without gov't intervention or control or screwing up.

But with a demon in the mansion, and spineless Republicans in the legislature, our state is more likely to follow failing states like New Jersey, New York, Illinois, and California. The examples of Florida and Texas, just to name two, are better examples for our state to follow. But with demons and spineless in control, our state will move in the wrong direction. When it comes to big government, demons lead the pack and consider NO OTHER alternative. Tax cuts increase state revenue. What's the demon scheme? Increase taxes. This is not an incentive for people or business. Yet it's the only thing that demons and media allies suggest to increase revenue and therefore spending.

If it's a demon scheme, it's almost always automatically wrong. If the spineless Republicans can't develop a spine, Roy is going to ruin our state.

May 14, 2017 at 2:38 pm
bruce stanley says:

Yes, Norm is right, taxpayer money should not be used to bribe companies to relocate to NC from out of state. Instead, the NCGA is on the right track by making NC a low tax, business friendly state for all businesses whether they are in state or out of state.