Tuesday, February 17, 2015

"60 percent of NC job incentive deals have failed"

"About 60 percent of grants issued through North Carolina’s primary jobs incentives program haven’t delivered on their promises...

...Job Development Investment Grants issued between 2002 and 2013 ...promised up to $662.19 million to 102 companies if they create a target number of jobs.

The Justice Center found that 62 of those grants were cancelled because the companies didn’t create enough jobs, meaning the state didn’t give them the grant money.

Most of the failed grants were issued under former Govs. Mike Easley and Bev Perdue. It’s too soon to know how many of the JDIG deals announced by Gov. Pat McCrory have fulfilled promises.

“If North Carolina continues to use incentives to pick winners and losers in economic development, the state needs to do a much better job of picking winners,” said Allan Freyer, who heads the center’s Workers’ Rights Project and wrote the report.

The report comes one day after The News & Observer published its own analysis of the JDIG program. The analysis found that McCrory has largely depleted the fund by promising nearly $300 million in grants, much of it for companies in Wake and Mecklenburg counties.

Later this week, N.C. House Republicans are expected to unveil an economic development bill that addresses the incentives program..."

"An analysis of incentives records from 2011 to 2014 by The News & Observer found that:

• Two years into office, McCrory so far has offered more of the JDIG grant money than Perdue did in her last two years in office. McCrory’s administration has promised about $299 million through 2026 for 15,356 jobs since the governor took office. In Perdue’s final two years in office, JDIG grants totaled about $183 million through 2024 for 12,046 jobs.

• Overall, companies receiving JDIG grants since McCrory took office have been promised an average of $19,502 per job created. The per-job average in Perdue’s last two years was $15,172. In at least two cases, McCrory’s administration offered twice as much money as Perdue did for companies bringing a similar number of jobs with similar wages.

• More than 80 percent of JDIG grants issued under McCrory have gone to jobs in Wake and Mecklenburg counties, the state’s most prosperous and popular locations. Less than 10 percent has gone to counties categorized as North Carolina’s poorest. During Perdue’s final two years, about 67 percent of JDIG funds went to Wake and Mecklenburg, with about 10 percent to the poorest counties.

...The program has detractors who see the grants as unnecessary handouts to big business. “Instead of giving off these specialized tax incentives, why don’t we lower taxes for all businesses?” said Donald Bryson, who heads the North Carolina chapter of the conservative group Americans For Prosperity.

Bryson said his group will oppose more funding for JDIG and similar programs. “I’m not entirely sure that the Commerce Department was a good steward of the people’s money when they ran out of money,” he said."

...Little for rural counties

Rural counties have seen few of the jobs lured by the JDIG program.

Last year, about 83 percent of JDIG grant money went to companies locating in Wake and Mecklenburg counties, while only 4.4 percent went to the counties that the state categorizes as poorest.

That’s an increase from 2012, when about 60 percent went to Wake and Mecklenburg and about 11 percent went to the poorest counties.

“One of the criticisms that I have heard with JDIG is that that’s where a lot of the funding has gone,” said Rep. Stephen Ross, a Burlington Republican who co-chairs the House commerce committee. “The flip side of that is if you look at where industry tends to want to locate, your larger metropolitan areas tend to attract industry.”