Economic development clashes with ‘corporate welfare’

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NOR’EASTERN N.C. — Everyone wants to attract businesses that will create new jobs and stimulate sales taxes and other taxes. But there is a major disagreement between segments of our society as to the best method to accomplish that goal.

There are several choices — all of which get us to the result we seek — albeit with different means and results.

We have seen the reports stating the prospects of an automobile assembly plant in Edgecombe County, in the Rocky Mount area. Some people including state House Rep Bob Steinburg, believe this project, if it comes to fruition, would be a game changer for the eastern North Carolina counties.


Likewise, he believes that although economic incentives by the state would be used, the ancillary suppliers that would also come here would be at no cost to the state, with additional jobs and economic development. Therefore, on balance, Steinburg believes that although he is opposed to Corporate Welfare, this type of project will make such a large difference, that he is in favor of the incentives.

On the other hand, many believe that Corporate Welfare, as they refer to it, is a waste of funds, which has mixed results in North Carolina.

In particular, opponents have mentioned the proposed relocation of the Toyota North American Headquarters to Charlotte. The state was willing to give Toyota $107 million. But in the end, Toyota decided against North Carolina. Not because of the money, but because Charlotte did not have airports with direct flights to Japan.

Competitor states such as South Carolina have won these facilities because of lower air emission regulations. Alabama has won because of large-acreage sites on the scale needed for a big plant. And Mexico has won auto plants because of low wages, infrastructure and free-trade deals.

State leaders have suggested that to attract businesses, North Carolina should use the incentive monies to lower tax rates, provide better roads, and remove burdensome regulations. In that regard, some are concerned incentives might trigger a shortfall in tax revenues if the economy becomes recessionary.

Others have complained that job growth — from an auto plant as planned — would not be as beneficial for employees in the northeast from Elizabeth City down to Williamston, due to the distance and drive time. But there are plenty of workers driving from Elizabeth City to the Hampton Roads shipyards every day, with a drive time of one hour or more, one way.

In addition to the forgoing, we must focus on the prospects that the auto plant might be the impetus for a four-lane interstate highway connecting the VA/NC to Williamston.

Without the fast track to jobs that an auto plant would provide, multiple smaller scale projects could achieve the same result. Many people in the Elizabeth City area will recall the debate over incentives being sought by the developers of the new shopping center adjacent to Walmart.

So just about any major employer will be seeking incentives to bring their businesses and employ our citizens. Therefore, over a single period pf time, clearly, the auto plant will produce more direct and ancillary jobs than any other business opportunity.

After Gov. McCrory was elected, people were demanding to know where the jobs were — as if he could wave a magic wand! Whatever we think about the best method, at least our citizens will know that every opportunity is being pursued.