The need to keep North Carolina's good deal

Published November 29, 2014

by Tim White, Fayetteville Observer Editorial Page Editor, published in News and Observer, November 28, 2014.

Stop me if you’ve heard this before. At the beginning of this month, Site Selection magazine ranked North Carolina third on its list of the top 10 business climates in the country.

Site Selection is a magazine that’s well read by economic developers and the corporate people who decide where they’re going to locate new plants and offices. Making the top 10 is a good thing. And North Carolina has been on that list for as long as I can remember.

This time, Georgia and Louisiana are ahead of us, and Texas is one place behind us. Site Selection has a strong Southern bias. Not a single Western state is on the list, nor any from the Northeast. Ohio is the only non-Southerner on it.

A week later, Forbes magazine published its top 10, and there we were again, at No. 3. But the Forbes list was strikingly different from the Site Selection picks. Utah ranked No. 1 and North Dakota, whose economy was dramatically brought to life by the fracking boom, ranked second. Virginia and Texas (4 and 6) made the list, of course, but so did such disparate places as Colorado (5), Nebraska (7), Washington state (8) and Minnesota (9).

My former home state of Massachusetts surprisingly ranked 13th on the list, even though it came in at 49th in business costs. But it ranked first in quality of life (even with New England winters) and third in labor supply, which likely refers to the abundance of highly educated, ready-for-high-tech workers there.

Forbes ranked North Carolina fourth in business costs, seventh in labor supply, second in regulatory environment (or lack thereof), but 24th in economic climate and 31st in quality of life – two issues that could hurt us.

Gov. Pat McCrory’s office sent out a news release trumpeting the story. If he’s running for re-election in two years, he’s up for a tough battle against Attorney General Roy Cooper, and he’ll want to take full credit for our economic revival. So will the Republican lawmakers who rule the General Assembly and who have created that nearly invisible regulatory environment.

But don’t believe them. Fact is, we’ve never had much of a regulatory environment here, at least not compared with other states. As Forbes points out, North Carolina’s percentage of unionized workers is the smallest in the country, and labor costs here are the third-lowest. That’s nothing new.

And one more thing: Forbes says “North Carolina has ranked in the top five overall each year of our Best States study.”

Year after year, for way longer than I’ve been here, Forbes, Site Selection and other institutions that rank business climates have had North Carolina on their short list. It’s a good place for corporations to do business. And neither Democrats nor Republicans have yet been able to destroy that distinction.

But they could.

We have, for example, a deteriorating transportation infrastructure and steadily declining tax revenues flowing into our highway funds. We are lagging in workforce training, especially for high-tech, and lawmakers appear determined to gut our incentives programs. All of those areas are important criteria in ranking this state’s appeal for economic development. And they’re important to companies thinking about moving here.

But the real bottom line is hopeful: North Carolina is such a good destination for business that neither political party has been able to screw it up. The message to Raleigh is simple: Hold a steady course. Do the basics and make us the Good Roads State again. And train a second-to-none workforce. Then get out of the way. We’ll be fine.

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Tim White is the Fayetteville Observer’s editorial page editor.