State leaders: A company like Volvo can’t find ‘certainty’ in NC incentives

| April 22, 2015

12824259151862440505car1v_vectorizedby Richard Barron, Greensboro News-Record, April 21, 2015.

Volvo may have dropped North Carolina from its list of prospective plant sites because this state can’t promise its incentive programs have solid legislative support, the state’s administration suggested Tuesday.

Amid reports that Volvo is considering South Carolina or Georgia for a $500 million plant, North Carolina officials won’t comment on whether this state is still on the list.

But a spokesman for Gov. Pat McCrory is sending a strong message to the General Assembly that its failure to quickly act on his proposed incentive legislation has hurt the state’s chances of landing major corporate operations.

When asked Tuesday about Volvo, McCrory spokesman Josh Ellis would say only, “We need certainty and a long-term solution, and we needed it six months ago.”

That means the General Assembly should have moved to expand and extend existing programs that McCrory believes will attract jobs.

For two months, McCrory’s incentive proposal that targets such large companies as auto manufacturers has languished in the General Assembly.

The House passed the N.C. Competes Act, House Bill 117, on March 5 and sent it to the Senate, where it landed in a committee and stayed there while Senate leaders proposed a different bill designed to lure companies with lower corporate taxes across the board.

The Senate Finance Committee plans revisit the bill today and a Senate bill that offers a variety of tax law changes to encourage small businesses.

Volvo has been rumored for months to be considering North Carolina and several other states for an auto factory, but reports in the past week say South Carolina and possibly Georgia have made the short list.

N.C. Commerce Secretary John Skvarla echoed McCrory. He said that without the new legislation, the state won’t have the tools it needs.

“Everybody wants the 800-pound gorilla, but they’re hard to catch,” Skvarla said in a telephone interview.

The law would allow the state to commit up to $45 million for job-development grants based on the number of jobs a company creates over a specified number of years.

That number is currently capped at $22.5 million.

The act would also extend the expiration of the program from Jan. 1, 2016, to Jan. 1, 2020.

The program pays corporations a portion of the income tax paid by an employee in a new job. Skvarla said critics believe it is simply a giveaway, but the money is paid only when it is earned by a new employee.

If the legislature can’t guarantee the program will exist beyond Dec. 31, that sends a bad message, he said.

A stronger law means “not only are we committed to the program, but that we’ve got the tools to make things happen,” Skvarla said.

The bill also offers a $20 million fund that could assist in developing an automotive megasite, something local officials want to do on 1,800 acres in Randolph County.

If Volvo bypasses North Carolina, it’s another setback for the only Southern state without a car plant.

The Reuters news agency reported Friday that Volvo had narrowed its search to South Carolina and one other state. The Atlanta Journal-Constitution then reported that Georgia is that other state.

Category: Economy, SPIN Blog

Comments (1)

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  1. Richard L Bunce says:

    Give Volvo and all other businesses in NC or considering NC certainty they can believe in. Significantly reduce State and Local tax rates and regulations.