The incentives game is one in which states and localities offer corporations generous sweeteners (tax breaks, free land, site preparation, etc.) to bring jobs to that state or region. Virtually all states justify it by saying some variation of, "If we didn't offer incentives, we would not land any new jobs because everyone else is playing this game."
The public doesn't get much of an opportunity to see the game in progress, because it's played in a closed stadium with only state and company officials in attendance. We don't want other states to know what we're offering. But now and then some light is shed on a particular deal, which is educational for the taxpayers (who are funding these incentives, after all) and somewhat disheartening.
Case in point: the courtship of Continental Tire, a German firm, which the state wanted within Tar Heel borders for its 1,300 jobs and a $500 million plant. The company was going to get incentives running about $100 million, including $45 million in cash, early on. Its plant would have been on a site near the border of Brunswick and Columbus counties in southeastern North Carolina.
But instead it's going to Sumter County in South Carolina.
Republicans say Gov. Beverly Perdue and her advisers weren't sensitive to the possible "cronyism" in the site choice. They note that the owners of the land where the plant might have been located happened to include some Democratic campaign donors and state Sen. Michael Walters, a Proctorville Democrat. And though Republicans proposed that the $45 million be paid out over 15 years, Perdue's administration was ready to try to find the money immediately.
At least, this is the tale as it's unfolded thus far. Now a partisan scrap is on. Senate Majority Leader Phil Berger, Republican of Eden, says basically that Perdue blew it. And he invoked as well ethical questions about the fact that Perdue's son works for Womble Carlyle, a law and lobbying firm working for Continental.
Womble Carlyle was not involved in the site selection, however, says Perdue's Department of Commerce Secretary Keith Crisco. He defends the attempted deal as providing a worthwhile return, and says the company made it clear that it needed the $45 million up front - that it was what "they clearly needed to come here. It wasn't a bargaining thing."
That's interesting, in that cash up front, millions of dollars of it, seems a pretty extreme form of incentive. It's all the more interesting because according to the Associated Press, South Carolina is giving only $31 million up front. (Excuse the "only.")
There's no question that North Carolina desperately needs jobs, and it's understandable that the Perdue administration was eager to do a deal. It's too bad this one collapsed. But perhaps $45 million can be put to even better use somewhere else.
