GREENSBORO -- The following editorial appeared last week in the Greensboro News and Record:
Give Dell Inc. a little credit. The computer maker's promises of major investment and job creation never really came to pass, and the company will close its doors next month after only four years in operation. [Dell has since announced that it will keep the plant in partial operation through April.]
The plant closing clearly demonstrates Dell's keen eye on the bottom line. The company's stock price has dropped by more than half since the plant opened. Dell is losing market share. Its most recent earnings report was grim.
So it was a nice surprise to hear that Dell agreed last month to repay - without fuss - $26.5 million in incentive money it got from Winston-Salem, Forsyth County and two related economic development concerns. The computer maker also repaid the N.C. Department of Commerce another $1.5 million. A deal's a deal, and Dell repaid everyone swiftly after it fell short of its employment and investment targets.
Now comes word that the state's Department of Revenue has its hand out, too. Dell has made it clear that its wallet is now closed.
At first blush, Dell's heck-no reaction seems churlish. If Dell had to repay the city and county, the thinking goes, it probably owes the state more money, too, right?
Well, no. Or maybe. It's really hard to tell. As part of the incentives package that lured Dell here in 2004, the state granted the computer maker up to $6 million in tax credits, which are discounts to its annual tax bill. Dell says it took the credits it was entitled to but will not say how much it claimed. The state argues it can reclaim that money because Dell no longer meets the criteria that it once used to qualify for tax credits.
A story in the Winston-Salem Journal notes that the 2004 state law that granted Dell tax credits isn't particularly clear. In any case, the law appears to have no provision for retroactively revising Dell's tax payment. And good luck trying to figure out the amount of money being squabbled over: The amount of money Dell claimed in tax credits is exempt from the state's public record laws.
This latest incentives-related argument shows how opaque the incentives game continues to be. The state should always set clear benchmarks for investment and job creation as well as consequences for missing those targets.
At some point the economy will improve and companies will come looking for sites again. State officials should use that time to review how it awards and monitors corporate incentives.
