Acknowledging that it will “come as a shock to some” given the furor that enveloped the state after the controversial House Bill 2 became law last year, Site Selection magazine has ranked North Carolina tops in economic development.
North Carolina’s No. 1 rating for 2017 – a ranking that is based on 2016 data – didn’t come out of the blue. Last year the state tied with Texas for the No. 1 spot in the magazine’s Prosperity Cup ranking, which it previously called Top Competitive States.
But in the latest rankings North Carolina has no peer. Texas fell to No. 4, behind Tennessee and Georgia.
The ranking “may confound those who had written off the Tar Heel State as a business-climate backwater” after House Bill 2 became law in March 2016, the magazine noted.
HB2 made the state the butt of late-night talk show jokes and prompted companies such as PayPal and Deutsche Bank to scrap expansion plans in the state. Or, as the magazine stated, “the bill was an albatross around the neck of those championing the state as a location for facility investment.”
A reminder: In March, Gov. Roy Cooper signed a law that replaced HB2, which prohibited local governments from enacting anti-discrimination protections for LGBT people and required people in government facilities to use bathrooms matching the gender on their birth certificates. But the new law includes other provisions, including a prohibition on local governments from regulating public accommodations before Dec. 1, 2020, that have drawn criticism from the LGBT community and others.
But even when HB2 was the law of the land, Site Selection found that North Carolina had plenty to offer.
It noted that the state had “one of the most educated workforces in the U.S.; a temperate climate; two international airports, including a major hub for American Airlines at Charlotte, which is also a top financial center; ... coastal ports; a desirable mid-Atlantic location; top research universities and community colleges and a 3 percent corporate income tax rate – the lowest such rate east of the Mississippi other than Ohio, which imposes a gross receipts tax in lieu of corporate income tax.”
The Prosperity Cup rankings shouldn’t be confused with Site Selection’s Business Climate rankings, which the magazine issued in November. North Carolina ranked second in the 2016 rankings, identical to its 2015 ranking, behind Georgia.
Site Selection also issues an annual Site Selection Governor’s Cup that ranks the states based on the number of economic development projects they win. North Carolina ranked 4th in 2016 for the total number of projects and 7th in number of projects per capita.
Among the factors that go into the Prosperity Cup: new and expanded facilities and the capital investment that goes along with them; new jobs created; Business Climate ranking; state tax climate as ranked by the Tax Foundation; and performance in the Beacon Hill Institute’s State Competitiveness Index. For factors such as number of facilities and new jobs, both total numbers and per-capita numbers were considered.