South By North Strategies, Ltd.

A new report from the NC Budget and Tax Center outlines five strategies for improving the accountability and effectiveness of the state’s economic development incentive programs. From the report …

Incentive deals offered by county and municipal governments are the most common form of economic development subsidies in North Carolina, yet current law does not require those deals to include performance criteria, monitoring provisions, or clawbacks unless the incentive is matched by state JDIG or OneNC incentive funds. Although many local governments require some level of performance criteria in their incentive deals, many do not, leading to a situation where companies can take local incentive funds without any real legal obligation to create the jobs they promised. State lawmakers can close this loophole by extending current state‐level performance criteria to all incentive deals at the local level.
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These criteria can also extend to any other incentives granted by the General Assembly above and beyond those provided in the JDIG and OneNC Programs. Except in the very rare cases of large‐scale “transformative” industrial development efforts, the state should avoid granting “special” incentives above and beyond those provided through OneNC and JDIG, as “special” deals tend to cost significantly more in terms of incentive dollars and are often given without adequate accountability and performance criteria attached. Moreover, the statutory programs already provide sufficient incentives for most projects, so special incentives are largely unnecessary….