Sales tax [abatement] legislation passed by the General Assembly put North Carolina in a position to recruit Google. Without it, Google likely would have located in a state that did not impose those taxes on it.

If Google does not locate in Lenoir, the county will have lost the opportunity for up to 210 new jobs at an estimated average wage of $48,000 and investment of $600 million. Without that investment in facilities, the county will not enjoy the economic impact of major construction activity, including the many construction jobs generated during the building phase. Grocery stores, barbers, laundries and other retailers would not enjoy the purchases of the new employees. And if Google does not locate in North Carolina, it will certainly pay no property taxes here.

Those opportunities are vital to a hard-hit county which, as a center of the furniture industry, has experienced job losses in the thousands as furniture manufacturing has largely moved overseas and has suffered disproportionately from trade policies that accelerated that process.

No one is writing Google a check for the estimated amounts you have featured in your headlines. Incentives offered by the state are dependent on future tax receipts paid by the company. They are primarily reductions of future tax revenues that we do not now receive, nor would we ever receive if Google does not locate here. Google will receive future incentive benefits only if it creates the jobs and makes the investments that generate this tax revenue for their incentives.

Your choice of a 30-year time frame as a basis of estimating incentives is intriguing. Other incentive packages that have been cited were not measured over so long a period. Ten years constitutes a long time in today's rapidly changing business world. Had you used a 10-year time frame, the amounts you described would have been reduced by two thirds.

At the Department of Commerce, we administer the JDIG program, which offered a grant of up to $4.8 million to induce Google to locate in the state. The law appropriately requires that we undertake cost-benefit analyses as a basis for our grants. Our model indicates that gross state product for this project would increase by about $1 billion over the 12-year term of the grant.

In offering the grant, the committee that makes grant decisions and the Commerce Department acted based on a thoughtful analysis of the many benefits derived from attracting Google. We approached the process in a rational and logical fashion. We do our work based on facts, and not in reaction to the occasional rhetorical hyperbole that sometimes slips into any negotiating process.

We are pleased that Google will join the Caldwell County community, where its presence will make a positive economic and psychological impact. The company's decision is affirming to a community which has suffered huge job losses and attendant despair. And that decision will not cost the state any money that it had before Google arrived.

James T. Fain III

Secretary

N.C. Department of Commerce

Raleigh

(The length limit on letters was waived to permit a fuller response.)