The price of jobs
Published September 3, 2015
Editorial by Greensboro News-Record, September 3, 2015.
Novo Nordisk was frank in explaining its decision to build a second manufacturing facility in Clayton: “After a thorough evaluation of multiple sites and an extensive vetting process, Clayton ended up being our preferred location,” the Danish pharmaceutical giant said in a news release Aug. 26. “We already have a large and very professional organization there and an excellent collaboration with city, local and state leadership, and we appreciate the incentives they have secured in connection with this investment.”
Those incentives could come to more than $22 million — a lot, but not too much to secure a private investment worth more than $1 billion. The company, which already employs about 700 workers at its first facility in the Johnston County town, said it will add as many more over the next five years at an average annual compensation of $68,420.
That’s a winning deal for North Carolina, adding good jobs at good pay. The announcement also focuses more global attention on the state and its life sciences industry, particularly in the Triangle area. Johnston County is just southeast of Raleigh. Yet, there are concerns about the state’s ability to continue landing economic development projects like this.
Gov. Pat McCrory’s office credited the North Carolina Biotechnology Center for its support of the Novo Nordisk project. But the N.C. Senate’s proposed budget would eliminate state funding for the Biotech Center.
And, despite McCrory’s pleading, the legislature still hasn’t passed a bill appropriating funds needed to offer incentives to more recruiting targets. The governor toyed with the idea of calling a special session a year ago so the legislature could put more money in the economic development pipeline. He didn’t, waiting instead for lawmakers to return to Raleigh in January. At that time, he called it “the No. 1 priority in the first two weeks of the legislative session” to get an economic development bill. He’s still waiting.
In May, John Lassiter, chairman of the Economic Development Partnership of North Carolina, told a Charlotte civic group that the delay was hurting the state’s ability to attract new businesses. “Politics aside, the market is now beginning to say North Carolina is not willing to compete,” he said. He’s still waiting, too — and exasperated.
“We were promised we could get the bill in front of the House and the Senate early in the session,” he told the News & Record’s Richard M. Barron last week. “Now, it’s almost Labor Day.”
The legislature has spent plenty of time telling cities and counties how to structure their local governments, but it’s not doing enough to create new jobs — even as the state’s unemployment rate has increased for five consecutive months from 5.3 percent to 5.9 percent.
The Senate complicated things when it combined the economic development bill with its scheme to redistribute sales-tax revenue from more prosperous to poorer counties. Beyond that, many leading senators think that cutting the corporate income tax is all that’s needed to draw industries to North Carolina. They don’t like to grant special tax breaks to some businesses.
As a principle, that may be admirable. But it doesn’t work in the real world. If North Carolina wants to land more deals like the Novo Nordisk development, it’s got to compete against states that don’t hesitate to offer incentives.
September 4, 2015 at 8:52 am
bruce stanley says:
Wrong. Corporate welfare is not good use of the taxpayer's money. Lowering income tax rates for C Corps and the individual rates for S Corp owners is the most effective path to GDP growth and Job growth. i.e. See Texas
