Business Subsidies in NC

This week's special session of the General Assembly marked a turning point in North Carolina's economic development policy.

The special session resulted from Gov. Mike Easley's veto of a bill that would have provided up to $40 million in incentives to Goodyear Tire & Rubber in exchange for investments in the company's tire plant in Fayetteville. In a departure from past policy, the state would provide the incentives even if Goodyear reduced the size of its workforce.

In the end, the governor and legislature agreed to a compromise that would provide up to $30 million in incentives to Goodyear and another $30 million for Bridgestone-Firestone, which also operates a tire plant in North Carolina. The compromise would provide state incentives to firms already operating in North Carolina even if those firms reduce their employment roles by up to 20 percent. Moreover, Bridgestone likely will qualify for incentives for investments that it already decided to make without public funds.

To learn more about this contentious debate, see the following resources:

Laura Leslie, "Incentives Compromise." WUNC Radio (audio news report)

Elaine Mejia, "Risky Business." NC Budget & Tax Center (analysis)

John Hood, "The Giveaway May Yield Surprises." Carolina Journal (commentary)

Rob Schofield, "We Can Do Better." NC Policy Watch (commentary)