North Carolina has pledged more than $ 1.3 billion in tax incentives to 58 companies in 2021 in return for development, according to a report released Thursday.
Raleigh-based think tank the John Locke Foundation has found that the state has significantly exceeded grants to businesses over the past two years, according to its report.
North Carolina has pledged $ 146 million in tax credits to 66 companies in 2019 and $ 519 million to 48 companies in 2020.
Tax incentives are conditional. Businesses must meet employment targets and deliver promised economic benefits to the state. North Carolina uses investment grants to attract large businesses and jobs to the state. Its employment development investment grant is supposed to offset the cost of new developments or extensions. The amount of the multi-year grants is based on the withholding of personal income tax projected on new jobs. The state also offers One North Carolina Fund grants to companies, which are awarded in 25% increments.
The companies that received the grants in 2021 pledged to create 15,670 jobs. Among the biggest chords were Apple and Toyota. Apple has pledged to create 3,000 jobs for its 39-year, $ 846 million incentive program. Toyota said it would create 1,750 jobs in exchange for $ 79.1 million over 20 years.
The Center for Economic Accountability (CEA) called the North Carolina Apple deal the “worst economic development deal of the year” in 2021. CEA analysts said the economic benefits were inflated and Apple would have chosen North Carolina for its new campus without the grants. Apple has also pledged $ 1.5 billion a year in economic benefits to the state, a $ 100 million fund to support school and community initiatives, and more than $ 110 million for broadband and internet projects. infrastructure in rural areas.
Report author John Locke, researcher Jon Sanders, also criticized the growing incentives.
“It is not ‘economic development’ to rob Peter to pay Paul,” Sanders wrote. “The fact that consumers and businesses are supporting giveaway programs for privileged cronyism companies diminishes job creation opportunities statewide because it ‘creates’ jobs in one field.”
North Carolina Gov. Roy Cooper’s office did not respond to a request for comment on the tax incentives Thursday.
A review of the One North Carolina Fund and Job Development Investment Grant programs in December 2020 by WRAL-TV by December 2020, the two programs had only achieved half of the employment targets announced between 2009 and 2016.
North Carolina terminated its subsidy incentive agreement with Germany-based Deutsche Bank in July 2020 after the financial institution failed to honor its end of the agreement. The bank promised to hire 250 local employees for its Cary plant in exchange for $ 3.4 million in grants in 2015. The company failed to meet the employment target and ended up laying off employees .