The N.C. House took a final 78-24 vote Wednesday to replenish the state’s main incentives fund to recruit jobs, sending the measure to Gov. Pat McCrory.
Eighteen Republican legislators and six Democrats opposed House Bill 117. Many of them objected to the state’s providing incentives to some companies and not others, arguing that the government is picking winners and losers.
The bill is a major priority for McCrory, who was expected to sign the bill; press secretary Josh Ellis said he doesn’t know when.
“In today’s global economy, we need a robust set of economic development tools in order to attract new companies to our great state and to effectively compete for expansion opportunities considered by our existing companies,” said Rep. Susan Martin, the Wilson Republican who presented the bill to put new money into the Job Development Investment Grant Fund.
The House and Senate compromise package would increase the cap on JDIG incentive awards from a current $15 million per year to $20 million a year. The cap would be increased to $35 million for any year in which the state lands a “high-yield” jobs deal, one in which a company invests at least $500 million and adds at least 1,750 jobs.
Those types of companies would be eligible for more generous incentives. That provision is aimed at attracting a large manufacturer, like an auto plant.
Wednesday’s debate was short after two hours of discussion Tuesday. Rep. Paul Luebke, a Durham Democrat, said the legislature is contradicting its own policy of lowering the corporate tax rate for all businesses.
“Companies are settling in Durham County who would do so without the incentive,” Luebke said Wednesday. “What we’re doing is giving away money that could be used in other settings.”
Supporters of JDIG say the companies that receive incentives would otherwise locate in other states that offer more sweeteners. Recipients of incentive money must sign a document saying they would have gone elsewhere without the boost.
The compromise bill before legislators this week also extends tax credits aimed at specific industries – part of the original economic development bill the House approved in March.
Aviation fuel, technology data centers and motor sports would all benefit from sales tax exemptions under the bill. Republican leaders say companies might leave North Carolina if the credits were allowed to expire. But Luebke said the legislature shouldn’t carve out exemptions for airlines and NASCAR while adding new sales taxes on services like auto repair.
“We’re helping groups that really don’t need it, but we’re putting a burden on our average citizens,” he said.