Carlos Guerra
BALTIMORE — Robert Orr spent the last 10 of his 18 years in North Carolina's judiciary in the Supreme Court before leaving to form the North Carolina Institute for Constitutional Law, which will target an issue that reaches far beyond his state's borders.

"Our primary issue is the so-called economic incentives — subsidies — that North Carolina has been engaged in heavily for 12 years," he says in a genteel drawl.

The institute first targeted $200 million of "incentives" that North Carolina gave pharmaceutical behemoth Merck. But two days after the November election, Orr says, the Legislature was rushed into special session and quickly approved a $240 million incentives deal for an unnamed recipient.

"When the legislation was discussed — it wasn't really debated — Dell was rumored to be the company, and 10 days later, (Dell's) CEO and the governor announced that Dell was coming," Orr says with a slight grimace. "Dell then proceeded to play off two counties against each other and received in excess of $37 million more."

The total is now almost $300 million, he says, "for the creation of some 1,600 jobs, virtually all of which will pay $28,000 or less."

He is even more galled by accounts of the secret negotiations.

"The press got the secretary of commerce's notes of the negotiations with Dell, and in them, the representatives of Dell said, 'We think it's unpatriotic not to give us this deal,' and, 'We don't want to pay taxes to North Carolina.'

"Others in the business community were offended by that."

The Dell giveaway has coalesced what Orr modestly calls "a broad-based coalition of free-market capitalist libertarian Republicans who think this is the wrong use of government revenues, and liberal groups that see it as corporate welfare subsidizing a select few and impacting human services like public education, and so on."

North Carolina's 18th-century constitution specifies that "the power of taxation shall only be used for a public purpose," he says, bringing into question if giving Dell a 15-year bye on corporate income and property taxes, free land and a building with its own road, all paid with tax dollars, is really serving a public purpose.

"Another old provision is the 'exclusive emolument clause' that in the modern parlance says the Legislature can't go granting specific favors to individuals here and there," the jurist says. "And we have another one that says it is unconstitutional to contract away the taxing authority, so the question is: By giving Dell a free ride on property taxes, is the local government, in essence, contracting away its taxing authority?"

NCICL is now finalizing two lawsuits that will be filed in state courts, one challenging the deal under the state constitution, and another that will also raise federal questions regarding the commerce clause of the U.S. Constitution, which empowers Congress to regulate interstate commerce.

"Every official that I talk to will admit that the current system is bad public policy, but their excuse is that everybody else is doing it so we have to do it," Orr says.

And corporate giants are cynically playing states and local communities off against each other. But he doesn't think an institute victory is the ultimate solution.

"The ideal solution is for the U.S. Congress to step up to the plate and say, 'Under the power of the commerce clause of the U.S. Constitution, we're going to legislatively prohibit states from directly subsidizing companies as an inducement to get them to move or to keep them from moving.'"

To contact Carlos Guerra, call (210) 250-3545 or e-mail

Portions © 2005 KENS 5 and the San Antonio Express-News.
All rights reserved.