No time for big incentives
The Daily News of Jacksonville
At the same time that Gov. Bev Perdue is announcing that the state’s budget gap is expected to exceed $3 billion, word comes that Toshiba America Nuclear Energy will be getting incentives amounting to $4.9 million, courtesy of North Carolina taxpayers.
You’d think that a state facing its worst financial crisis in decades would try to plug the leaks that could drain a budget already running dry.
One way to begin is eliminating line items in places the state should not be spending money anyway. One of those places is economic incentives, which supporters say is a tool in recruiting business and industry to the state.
The truth is, economic incentives rank way down the list in factors used by businesses in deciding where to locate or expand. Unfortunately, companies ask for incentive packages because, well, if you ask, you just might get the state to cough up some cash.
Toshiba America markets advanced boiling nuclear reactors and provides engineering and other services for nuclear power plants, according to the Charlotte Business Journal. The company hopes to create 194 new jobs over the next five years.
While it’s good to have new businesses come to North Carolina, especially in these times of economic hardship for many companies and workers, we question whether incentives should be a part of the equation.
Offering such grants to one company and not to another puts the government in the business of picking winners and losers. It’s patently unfair.
In addition, offering incentives doesn’t guarantee that a business will thrive in this economy or in North Carolina.
Take Dell Computers as an example. Back in 2004, Dell decided to locate a plant in Forsyth County after obtaining state and local incentives amounting to around $280 million. Dell, like a lot of other companies, has felt the pinch of the current recession and found itself laying off workers.
The current economic climate offers the perfect opportunity for Perdue, along with lawmakers in Raleigh, to change course when it comes to special incentives offered to select corporations.
The idea of the government offering such incentives to select businesses was never a good one. In economic hard times, it’s even worse.