McCrory facing pressure to call special session over business incentives

08/27/2014 6:39 PM

08/28/2014 6:02 AM

Pressure is building for Gov. Pat McCrory to call lawmakers back to Raleigh for a special session to pass economic incentives measures aimed at sealing the deal with companies considering North Carolina.

Top economic development and business officials on Wednesday joined Commerce Secretary Sharon Decker in calling for a special lawmaking period this year. Decker told the N.C. Economic Development Board at its meeting in Raleigh that job recruiters are “in a difficult spot” after the General Assembly’s failure in its just-ended session to add more money for Job Development Investment Grants and create a special, flexible fund aimed at closing deals in the latter stages of negotiations with companies.

McCrory spokesman Ryan Tronovitch said Wednesday that he had no news to report about a possible special session.

Decker told board members that money in the popular JDIG incentives fund would run out by late October without legislative action to increase the cap. The state, she said, is pursuing a large project that would take 80 percent of the fund’s balance, leaving little cash for about 30 other projects – and roughly 10,000 jobs – that are “in the pipeline.”

“We won’t get all of those jobs even with the Job Development Investment Grant, but I can assure you we will get fewer of them if we don’t have it,” Decker said.

She said the company that would take most of the remaining JDIG money is considering a location in the Triangle and that officials would know within a week whether the company is choosing North Carolina.

Meanwhile, C. Michael Smith, president of the N.C. Economic Developers Association, which has 550 members across the state, sent a letter Tuesday to Decker expressing concern that when JDIG money runs out, site selection consultants will no longer consider North Carolina a contender for large projects.

“Many current projects will no doubt be lost due to our lack of capacity to offer JDIG grants,” he wrote. Other states are already using the state’s inaction on JDIG as a bullet point against North Carolina’s recruiting efforts, he added.

Decker said the state also needs a flexible fund to use late in the negotiation process to close deals when facing stiff competition from other states. The Commerce Department, she said, is working on new language to make such a fund “more palatable” to lawmakers by gearing it toward infrastructure or site development. North Carolina is competitive today because of lower taxes due to tax reform, strong community colleges and other traits, Decker said.

“Where we’re not competitive are in the tools that we have at the end of the day that really, in some cases, are a decision point,” she said.

Decker wants a special session to be called soon. “Several folks have said to me, ‘Can you wait until the (2015) long session?’ We can’t, in my opinion,” she said.

House and Senate members who sit on the Economic Development Board said they are open to the idea of returning to Raleigh for more work if beckoned by the governor. “I think we’d be open to it for sure,” said Sen. Harry Brown, the Republican majority leader from Onslow County.

When the 2014 short session ended last week, lawmakers were unable to agree to an economic incentives package that included the JDIG and “job catalyst fund” provisions Decker is pursuing, among others.

Rep. Craig Horn, a Union County Republican, said the incentives bill, House Bill 1224, had too many controversial and complex provisions and was considered at the end of session amid pressure for the legislature to adjourn for the year. “It’s a recipe for disaster, and that’s what happened,” he said.

If McCrory calls lawmakers back, Horn suggested keeping the agenda simple and giving legislators a few days to mull over a new incentives bill. “I think we could go right to work, and we can provide North Carolina with the tools necessary to accomplish the goals as outlined by Secretary Decker,” he said.

Patrick Gannon writes for the NCInsider.com, www.ncinsider.com, a government news service owned by The News & Observer.

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