From the August 13, 2004 print edition
Incentives deals must be made public
|The mood is growing stronger among liberals and conservatives alike to find a way to stop the madness of cash and in-kind giveaways to corporations.
These days, whenever Gov. Mike Easley announces any new economic development project, you can bet your lunch money he'll dole out incentives - can you spell c-a-s-h? - to the company in question.
When Boeing decided in December to locate a manufacturing plant in Washington state, who could blame the company's executives? Washington taxpayers will be covering the $3.2 billion in incentives to the company over the next 20 years.
North Carolina lost out on Boeing, but on July 27, our governor announced that Network Appliance would be granted $8.9 million in state taxpayer money in exchange for expanding its operations here.
Incentives go to companies in other ways. Under the William S. Lee Act, corporations can be granted tax credits for creating jobs. In May, this newspaper reported that companies wrote off $79 million in taxes they otherwise would have paid - a record under the 8-year-old Lee incentives law.
That's not all. We, the taxpayers of this state, face losing more than $1 billion in tax revenue over the next five to 15 years under provisions of the Lee law that allows the "carry over" of credits.
Easley in December heralded the announcement that Merck & Co. will built a new vaccine manufacturing plant in Durham. While the governor was shaking the hands of company executives, he was slipping $36 million of your money into their corporate pockets.
Making this outrageous practice even more so is the fact that all of the negotiations that lead to giving away your money are done in secret. And state law allows it.
Under North Carolina's public records and open meetings laws, records related to economic incentives and meetings in which they are discussed are kept secret from you and me.
"The companies know what's going on, and the government knows what's going on," says John Bussian, a media lawyer and lobbyist for the North Carolina Press Association. "The only people in the dark are the people writing the checks. "
The law does state that once a deal is sealed, records are supposed to be opened. That's not happening. Officials in Jim Fain's secretive fortress called the North Carolina Department of Commerce pull out their black Sharpies and strike out sections of any documents that are released. They claim "trade secrets" and a bunch of other claptrap.
The way state government under Mike Easley and Jim Fain acts in regard to the public's right to know would have made proud repressionist governments of post-World War 11 eastern Europe.
Incredulously, public records related to the state's negotiations with Merck still have not been released - despite the fact that the governor announced the deal on April 6.
Don Hobart, one of the lawyers holding the keys of Fain's fortress, was asked at a recent press association gathering why that was the case. He responded that the records were being vetted by Merck.
Those in attendance were stunned by the answer. How could a corporation receiving millions of dollars in state money be allowed to decide what the public knows or doesn't know about how the deal was done?
Hobart responded that Merck was concerned that information about trade secrets might leak out.
Tell me this: Why on earth would Merck or any other company share "trade secrets" with the state's economic development reps - people who are little more than salesmen?
Newspapers in this state are trying to uncover details about the unseemly practicing of corporate welfare, but laws stand in our way. Bussian has drafted two simple paragraphs that would open the process to public scrutiny.
The state's Public Records Act, GS 132-6 (d) would be amended to read in part, " ... public records relating to economic incentives that may be offered by a public body and any proposed economic incentives that may be offered by a public body and any proposed economic development contract or commitment are public records
The Open Meetings Law, GS 143-318.11 (a) (4) would be amended to read, "Discussion of economic incentives that may be offered by the public body in negotiations or actions approving the signing of an economic development contract or commitment or authorizing the payment of economic development expenditures shall occur in open session."
Bussian tried to get this legislation introduced in the short session of the General Assembly but was rebuffed when Fain sent word he was opposed.
The press association will try again in the next session.
As Bussian puts it, "If we can't quit giving incentives, then we should open the process up."
@ 2004 American City Business Journals Inc.
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