BTC REPORTS: Special Deals, Special Problems - An Analysis of North Carolina's Legislature-Approved Economic Development Incentives

Special Report from the Budget & Tax Center
By Kenneth Thomas,
June 2012

Executive Summary

  • North Carolina’s statutory incentive programs offer some of the strongest firm performance and accountability requirements in the nation, yet the tendency of the General Assembly to pass “special deals”—those outside of the statutory incentive-granting process—creates a critical short-cut by which companies can avoid these accountability measures.
  • This short-cut has resulted in some of the largest incentive deals in the country and creates the possibility of weakening the state’s long-term ability to hold to its performance requirements.
  • In order to address this problem, legislators should consider refusing to agree to these special deals, except in extraordinary cases, and should certainly never extend incentives to firms that have already reduced employment. The legislature should also reduce intra-state competition by forcing companies to choose a single location within the state before agreeing to incentives.
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