Google perks may spur lawsuit

Special treatment offered, critic says

A vocal critic of incentives used to attract businesses is preparing to sue because of tax breaks worth millions that the state recently promised Google.

Bob Orr, executive director of the N.C. Institute for Constitutional Law in Raleigh, said Monday that the group's directors have authorized the institute to "move forward in its research and preparation of a legal challenge."

At issue is language approved by the General Assembly last year that excused Google from paying sales taxes on electricity and equipment. Because of the provision, the company, which in January agreed to build a data center in Caldwell County that could employ 210, could save as much as $90 million over three decades.

Orr, who is running for governor and plans to resign from the institute this month, said the suit will challenge the constitutionality of the exemption. He said the measure is illegal because it gave special treatment to one company, "which would seem to run counter to the fact that there be uniformity in the tax law." The suit could be filed by month's end, he said. Officials with the state Department of Commerce and attorney general's office declined to comment.

The institute was set back in a previous suit that challenged about $280 million in state and local incentives used to attract the Dell computer plant to Winston-Salem. In May, a Wake County Superior Court judge dismissed the case, which raised concerns similar to those that Orr said he intends to bring up in the Google suit. The institute has appealed and is scheduled to make oral arguments to the N.C. Court of Appeals on April 25.

The Google project has stoked anew a debate that raged after North Carolina won the Dell plant. Critics contend that politicians are going too far to pull new industry to the state. Recruiters say they must use incentives to compete with other states and nations.

When state and local inducements are combined, Google could save $260 million over 30 years, depending on how much it invests in Lenoir. Local officials waived most of the company's tax bill for that period. Orr, though, said that he will not challenge that package.