Quest for auto manufacturer pushes House to approve incentives bill

Posted March 4, 2015

— North Carolina's quest to entice an automaker to build a manufacturing plant in the state weighed heavily over Wednesday's state House debate over a bill to expand North Carolina's business-recruitment incentives program.

House members gave the measure, one aspect of which could cost more than $900 million over the next 15 years, tentative approval by way of a 87-32 vote. They will take a second vote Thursday before the bill goes to the Senate, where big changes are expected.

"Everybody knows what this bill is about. This bill is on a fast track because we're talking about an automobile (maker) coming to North Carolina, possibly even three," said Rep. Bob Steinburg, R-Chowan.

Steinburg said he has been an opponent of incentives but said he has been won over by pragmatic arguments, including an unemployment rate that remains stubbornly high in rural North Carolina.

"We are sending tons of money to rural North Carolina whether we pass this bill or not. That's a fact," Steinburg said.

He argued that money could flow either by way of investing in businesses or by spending money on unemployment insurance and other programs for those who can't find a job.

Opponents of the bill, which was outlined and debated in committees on Tuesday, said that incentives don't actually work, pointing to academic studies that show few, if any, net job gains after a government spends to lure a company. They also objected on philosophical grounds.

"The demand for economic incentives is a form of extortion," said Rep. Larry Pittman, R-Cabarrus.

The argument that every other state in the Southeast offers incentives, he said, shouldn't push the bill over the finish line.

"To me, that doesn't sound like a responsibly adult statement," Pittman said. "It sound to me, I'm sorry, like an adolescent excuse."

However, the draw of a potential automaker loomed large over the House debate Wednesday. Automakers are sought after because, once they arrive, they typically demand that parts suppliers locate nearby. As well, by their nature, they bring with them thousands of good-paying jobs.

"If we were just having a philosophical argument, I would agree with some of what's been said today," Rep. Jeff Collins, R-Nash, said. "We're not talking about a philosophical situation. ... We do have three auto manufacturers looking at locating in North Carolina."

Collins said that, among his constituents, the biggest boosters for this incentives deal were small-business owners who would not benefit directly but stood to serve the employees of the new corporate citizen.

While a majority of the chamber went along with the bill, some Republicans said even the lure of a "big fish" in the economic development arena was not enough to get them to compromise. Rep. Chris Millis, R-Pender, said that he believes incentives are unconstitutional.

The vote, Millis said, forces members to ask whether they were "preserving and expanding liberty, or are you aiding and abetting a foundation of tyrannical government?"


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