Economic development official says NC incentives fall short

by Wayne Faulkner, Wilmington Star-News, June 19, 2014.

Competition for jobs and companies is a "nuclear arms race" and the state's incentive programs don't match up, the head of the new N.C. Economic Development Partnership told a Wilmington audience Thursday.

The private, nonprofit partnership, headed by John Lassiter, was approved Wednesday afternoon by the General Assembly. It will function as the private side of the N.C. Department of Commerce, taking over some of the state's job recruitment and retention functions.

The state's incentive system "is not sufficient to make us competitive," Lassiter told a gathering at the Wilmington Convention Center sponsored by the Coalition for Economic Advancement, a local business advocacy group. Current incentive programs, One North Carolina and the N.C. Job Development Investment Grants, are capped unnaturally, he said.

Lassiter said, however, that he favored Gov. Pat McCrory's plan for film incentives, which replaces a 25 percent rebate with several separate credits and tax exemptions for expenses. But he said the current program favors short-term gains over long-term investment in the industry in North Carolina.

Lassiter outlined a long-term strategic plan for the state that was authored by the N.C. Economic Development Board, which he also heads.

Among 92 recommendations, the plan called for improving the business climate. Lassiter cited the reduction in corporate and personal taxes as a step toward better competing with neighboring states.

"We have an upside-down system today that doesn't encourage private investment because we don't take into account" angel investors, he said, referring to private investors who provide seed money to promising start-ups. The state has an enormous opportunity to attract innovators because tax structures in tech hot spots like the Silicon Valley and Seattle are becoming "punishing," he said.

The strategic plan also laid out recommendations on attracting talented retirees.

"How do we do the kinds of things that cause retirees to come here?" Lassiter asked. "I'm talking about the 55-year-old entrepreneur who says, 'I'm going to go closer to my kids but I'm not done working.'

"Our challenge is to figure out how to cultivate that."

He said North Carolina is No. 1 in the number of retired generals who are residents and No. 4 in soldiers returning to live here after deployment, adding that the state needs to find ways to harness that talent.

During questions from the audience, Jim Bradshaw, executive director of the Brunswick County Economic Development Commission, pointed out that large projects had been attracted to Brunswick's certified industrial parks but they have continuously been lured away by other states.

Lassiter said the state needs a closing fund as part of its incentives package, to help seal the deal on such large developments.

 http://www.starnewsonline.com/article/20140619/ARTICLES/140619618/1015/news0101?template=printart