Local Politics

Perdue defends business-recruitment incentives

Posted October 8, 2009

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— A day after Dell Inc. announced plans to close its computer manufacturing plant in Forsyth County and lay off all 905 workers, Gov. Beverly Perdue defended the state recruiting incentives that helped lure the company to North Carolina.

Dell opened the $100 million plant four years ago after state and local officials promised about $279 million in tax breaks and other incentives to attract the Texas-based company.

Dell closes N.C. plant Dell shutdown renews incentives questions

Much of the incentive money was tied to certain hiring and investment goals, and state Department of Commerce spokeswoman Kathy Neal said Thursday that the state has paid the company about $8.5 million to date in grant money, tax credits and work force training credits.

State lawmakers passed a computer manufacturing credit in 2004 to help lure Dell, and it was expected to account for the bulk of the incentives, Neal said. So far, it has generated only $100,000 for the company, she said.

In announcing the shutdown, a Dell vice president said Wednesday that the company would honor its agreements with North Carolina and Forsyth County and pay back any incentive money that it doesn't deserve.

"Every red cent of incentive money has to come back to the people of North Carolina," Perdue said. "The state has yet to put up the hundreds of millions (of dollars) that were committed because it was a five-year payout based on jobs."

Dell is the 12th company not to fulfill its obligations under a Job Development Incentive Grant from the state. Five others withdrew from the program, three declined the grant once it was offered and three had their grants terminated.

Under JDIG grants, the state refunds a portion of the payroll tax paid by the company on its new employees. The grants can last for up to 12 years, but a company much meet pre-determined hiring goals each year to get its annual refund.

North Carolina has awarded 95 JDIG grants since 2003. Together, they were expected to generate more than 34,000 jobs and $6.2 billion in corporate investment.

Former state Supreme Court Justice Bob Orr, who unsuccessfully challenged the Dell incentives package in court, said the state shouldn't be picking which companies should or shouldn't get incentives. He also said companies will locate plants according to their best interests, regardless of incentives.

"It's a bad deal because we're using the public's money to do things that are going to happen anyway," said Orr, who now is director of the North Carolina Institute for Constitutional Law. "We're simply being played for suckers, and that's what's so frustrating about it."

Perdue said tying incentives to job creation and investment means there's little risk for the state in the deal, so they make good economic sense.

"When 49 other states are using incentives, if you want to compete (you have to as well)," she said. "Maybe the people of North Carolina want to pull up the rug and say we don't want jobs, but I'm not at that place. I think we need to be aggressive on jobs, and as long as I'm governor, we're going to be."

15 Comments

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  • oyid Oct 9, 2009

    "McCrory will be running again. HHmmmm Charlotte does well...."

    Please, when!!!!! Hurry it up! Sensible governing by someone with backbone is what we need. Let's change the way politics is played. Play hardball first and then be a wimp AFTER you get what you want...do you understand.

  • mep Oct 9, 2009

    Clearly if our state can give HUGE tax breaks to these big companies, the tax code itself is not set to promote job expansion in the first place.

  • FairPlay Oct 9, 2009

    These incentives are not creating any solid jobs and as many as promised. Yes incentives work when companies are held to staying and bring more that a mere 500 jobs at minimum wage but most states ask the companies to provide job growth and environmental improvements. It seems Bev's PHD should have ben in business, not education. She is wrong for this state. McCrory will be running again. HHmmmm Charlotte does well....

  • ORMA Oct 9, 2009

    Of course she defends this. She defends the expenditure of alot of state money (our money) that the people of the state do not agree with. How much of this type of money is going to her friends?

  • dohicky Oct 9, 2009

    the government US and state could have given each american family a share of all the incentives and bailout money from this past year and we could all be doing okay. Guess that wouldn't work since they want us to borrow, borrow and borrow to keep the fat cats healthy. Get out of debt Americans, that is your only hope.

  • pwilliamson53 Oct 9, 2009

    Perdue is only harming our state. As her "constitutional right as governor" she will do what? Continue to harm our state, cause more job loss and higher taxes. Impeach this woman before our great state has nothing else to offer.

  • geosol Oct 9, 2009

    Until there is federal action to stop the state "incentives" nonsense, we'll have to play this game. Not to do so would be extremely irresponsible. If our Gov. didn't do allow state incentives and all the other states did, the GoLo haters would be crowing even louder about things they know nothing about. Federal action is needed to stop this nonsense.

  • WHEEL Oct 9, 2009

    You go Bev. What jobs did you get? A few "one contract" parachute sewing jobs in Roxboro paying the minimum wage.

  • Oct 9, 2009

    Perdue is such a joke, I trust nothing that rolls off the lips of Perdue. She can not budget, she can not control and she can not persuade the public to trust in her. The public voice needs to decide her fate soon or there will be hope left saving our communities, and then even Republicans will be unable to or care about bailing out the Obamanites.

  • whatusay Oct 8, 2009

    Perdue is trying to justify her expensive vacations, claiming to be cultivating new business ventures for NC, just like Easley.

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