Changes urged for incentives

January 7, 2012 

The N.C. Justice Center's Budget & Tax Center has issued a report proposing a number of changes to the way state and local governments provide incentives to companies that create jobs in North Carolina.

Central to the effort would be an approach targeting companies in high-growth industries that pay higher wages. The report calls for the state to increase the wage standards it requires for incentives deals.

The report calls for county and municipal incentive deals, the most common form of subsidies, to include the type of performance requirements and claw-back measures that the state program employs.

"State lawmakers can close this loophole by extending current state-level performance criteria to all incentive deals at the local level," the report says.

The report also calls for more transparency in what both the companies and the state are required to disclose.

The General Assembly recently mandated that companies receiving state incentives provide quarterly updates on job-creation and investment performance.

The N.C. Commerce Department is required to issue annual reports.

The Justice Center report says the requirements should go further, requiring Commerce to post documents detailing each incentive deal and showing how the company is doing in meeting its obligations.

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