WRAL Tech Wire

Tax Incentives for Jobs – an Expense or an Investment?

RESEARCH TRIANGLE PARK – Are local and state tax incentives for job creation an expense or an investment?

That’s the question politicians wrestle with, especially when projects such as the entertainment complex in Roanoke Rapids generate more controversy than tourist dollars.

On Tuesday, the Fiscal Research Division of the North Carolina General Assembly added fresh fuel to the tax break debate with a report that says the total economic development spending statewide totaled $1.26 billion for fiscal year 2006-2007.

At first glance, that’s a lot of money.

On the other hand, the $1.26 billion is a small fraction of the state’s $20.7 billion general fund and $41.60 billion in total spending.

In hopes of getting a better handle on spending/investment vs. return, the Skinny asked the N.C. Department of Commerce for job creation data linked to two of the state’s best-known incentive plans – the One North Carolina Fund grants (which require a local match) and Job Development Investment Grant (JDIG) program.

Based on data through November, JDIG grants this year have led to the promise and/or creation of more than 5,200 jobs.

The One North Carolina Fund grants – 38 in all, with 16 going to new plants, not expansions – have led to the promise of some 3,000 jobs.

This is just data from two jobs programs alone. But noting how many jobs are created by these grants and incentives helps add some needed substance to the ongoing debate about incentives.

Investment or expense? Well, just keep in mind a lot of these jobs would not have been won by North Carolina without the incentives. And it's hard to tax workers and plants that don't exist.

The Skinny

WRAL Local Tech Wire Publisher and Editor Rick Smith dishes out tidbits from the local technology sector. Read more articles…