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Lawmakers need to deal with pro-business incentives

RALEIGH — For good reason, some well-known Republicans in North Carolina have been among the biggest critics of business-recruiting incentives.

One of those Republicans, former Supreme Court Justice Bob Orr, heads a legal foundation mostly dedicated to bringing court challenges of North Carolina’s  inducements.

Of course, Republicans promote themselves as the pro-business party. But for the ideologically pure, picking winners and losers in business doesn’t sit too well with  conservative ideas like free enterprise and corporate survival of the fittest.

So, now that they’re about to control the North Carolina General Assembly, talk is that Republicans might undo some part of the state’s business-recruiting incentives.

It’s probably mostly talk, for the same reasons that Gov. Beverly Perdue is sounding the alarm about any pending unraveling of incentives.

Perdue says she’ll fight to save the state’s incentive programs because to not do so would mean allowing other Southeastern states to outcompete North Carolina for jobs.

“I don’t like them, but they are part of the game,” Perdue said recently.

Perdue said she could cite two examples of companies that brought jobs to other states because they offered better incentives.

The Democratic governor went on to say that Virginia, Georgia and Alabama offer better incentives.

Interestingly enough, the state that may lead the nation when it comes to lucrative incentives, Georgia, is dominated by Republican state officeholders. Republicans control both chambers of the legislature and a Republican resides in the governor’s mansion.

For Republicans in that state, picking winners and losers in business is just a minor inconvenience to philosophical sensibilities.

And, unfortunately, Perdue is right. If North Carolina reduces its incentives while other Southeastern states ramp up their offerings, the state will lose out on new businesses in some cases. How many is up for debate.

But North Carolina’s incentives — whether job tax credits, the governor’s  discretionary incentive fund or grants to offset payroll taxes — are hardly wanting. A Forbes magazine ranking examining states’ business climates ranked North Carolina fourth when it comes to incentives and regulatory environment.

The problem is that other states ranked high in the same category are all our neighbors, with one exception, Washington.

What should concern Perdue and legislators of both parties is that two of those neighbors, Virginia and Georgia, also rank higher on labor force issues like educational attainment.

Trying to improve the attractiveness of your work force with better schools isn’t easy when your tax base is being eaten away with more and more corporate giveaways.

Of course, Republicans and Democrats could start doing more than paying lip service to the notion that incentives are distasteful. They could begin discussions with other states about the topic and try to put more pressure on Congress to establish some kind of reasonable limits to the regional warfare.

With a little effort, they might even force Bob Orr to focus his attention elsewhere.

Scott Mooneyham writes about North Carolina politics for the Capitol Press Association.

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