May 22, 2008
The (Raleigh, NC) News & Observer on Corporate Welfare
Creating a culture of goodie-chasing is bad for business
By Max Borders
Governor Easley believes his recent wooing of a Kansas-based aerospace company to the cobweb-covered Global TransPark will "silence" critics who have called the $80 million project a boondoggle for over a decade. Now that we've slept on the news, allow me to break the silence.
The governor and General Assembly are fond of ribbon-cutting ceremonies signifying pledges to help North Carolina develop economically. Even though an overwhelming number of corporate welfare packages go to companies planning to locate in already prosperous areas like Charlotte and the Triangle, the government may really be trying to help Eastern North Carolina get a leg up.
Folks shout "Jobs! Jobs!" as soon as the scissors close. What most people fail to realize? A job "created" here, whether with public super-projects or bribes, is a job destroyed somewhere else in the state.
. . .
In other words, we rank No. 1 as a giver of handouts. But the question is not whether we're effective at giving away tax dollars (clearly we are). Rather, do we have an attractive business climate? Are we effective at drawing solvent businesses and creating real prosperity?
IT GETS WORSE: The Tax Foundation ranks North Carolina 40th for hospitability when it comes to tax burden on entrepreneurs. The Small Business & Entrepreneurship Council likewise rates North Carolina 39th in terms of "friendliest policy environment for entrepreneurs" in its 2007 Small Business Survival Index. (Of course, small businesses don't get incentives, but bankroll big companies that take corporate welfare.)
