Local News

Corporate Incentives In N.C. Come Under Fire

Posted November 16, 2004

— Dell, Merck and Credit Suisse are coming to North Carolina in exchange for big tax breaks. However, an expected constitutional challenge may cause a change in targeted incentives.

Based on promises of jobs, major corporate incentives packages sailed through special legislative sessions the past two years. Now, a potential court battle could put the handouts on hold.

"The state Constitution cannot be used when it's convenient and ignored when it's not convenient," said former Supreme Court Justice Bob Orr.

Orr's newly formed group, the North Carolina Institute for Constitutional Law, plans to help fight the incentives in court.

"It's hard to understand how giving Dell $250 million or Merck or Credit Suisse or whomever, how that constitutes a public purpose," he said.

"If it is government's business to take people's jobs and ship them overseas, then it also must be government's business to find them new jobs and we know that takes incentives," Gov. Mike Easley said.

Easley knows the debate well. As Attorney General eight years ago, he defended tax incentives in a case called Maready versus Winston Salem. The Maready challenge eventually failed, but not before stirring up uneasiness over incentives. The new case threatens to do at least that.

"I think if you have a lawsuit pending, it's unhelpful as you're trying to recruit industry in," Easley said.

Orr predicts a constitutional challenge of corporate incentives will be filed within the next two months.

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