Corporate Welfare Weekly - April 19th, 2010 – Issue 46
Apr 19th, 2010
April 19, 2010 – Issue 46
Recent Announcements…
$6,000,000 in incentives is being sought by American Express from the Guilford County Board of Commissioners. The New York-based credit card company is seeking a site to build a $400 million data-services operation that could employ up to 150 people. A public hearing is set for May 6 to consider the request. Amex will also seek incentives from the city of Greensboro. The amount is not yet known. The project will not produce enough jobs to qualify for state incentives.
~ Donald W. Patterson, News & Record, April 17, 2010
$150,000 in state and local incentives has been granted to Turbotec Products Inc. In mid-March, the state granted the company $76,500 from the One North Carolina Fund. Local governments are now offering their own set of incentives. The city of Hickory and Catawba County will tax only 25% of the company’s new real and business taxes for the next three years. Catawba County’s incentive amounts to $36,113.
~ Dianne Straley, Charlotte Observer, April 18, 2010
$125,000 in incentives has been granted to United Furniture Industries from the state’s One North Carolina Fund. The company will open a new upholstered residential furniture factory in Davidson County and intends to hire 150 people over the next three years.
~ The Business Journal of the Greater Triad Area, April 16, 2010
$150,000 in incentives has been granted to Mountaire Farms Inc. from the state’s One North Carolina Fund. The Delaware-based company will be expanding its Lumber Bridge chicken-processing plant. A local match is required.
~ Amanda Jones Hoyle, Triangle Business Journal, April 15, 2010
$350,000 has been granted to Albaad USA Inc. from the state’s One North Carolina Fund. The Israeli-based wet wipes supplier will be expanding its AFG Wipes plant in Reidsville.
~ News & Record, April 14, 2010
$2,250,000 in potential incentives has been awarded to Plastek Industries to add a consumer products division in Richmond County. The plastic packaging company will receive a $250,000 grant from the state’s One North Carolina Fund as well as a Job Development Investment Grant (JDIG) that could be worth about $2 million over the next nine years.
~ Philip D. Brown, Richmond County Daily Journal, April 12, 2010
$620,000 in incentives has been granted to Michelin North America Inc. from the state’s One North Carolina Fund to expand its Stanly County operations. The tire company claims they will add 74 jobs over the next three years and invest $11.3 million for the expansion.
~ The Business Journal of the Greater Triad Area, April 12, 2010
Quotes of the Week…
"Small business — which is the business that we need to encourage most — is driven by low tax rates, minimal policy requirements for inspections and other things, and zoning that allows individuals to do as they wish with their property,"
~ Chad Mitchell, candidate for Rowan County Commissioner, as quoted by the Salisbury Post. Mr. Mitchell was answering a citizen-submitted question about how to encourage new businesses to locate within the county. The forum was held at Catawba College.
“I think you should be able to go to the Revenue Department web site, call up a document and find out who got energy and other credits and how much. It should be transparent.”
~ Senator Clark Jenkins of Tarboro and member of the Joint Revenue Laws Study Committee comments about the draft legislation that will improve the tracking and reporting of incentive giveaways, as quoted by the Triangle Business Journal.
Panel wants better tracking of incentives
The Triangle Business Journal reported on April 9 that a legislative panel wants closer tracking of state incentives.
“The General Assembly committee that recommends tax code changes wants a more complete accounting of how North Carolina doles out economic development incentives, which stand at $1.22 billion granted to businesses.
In draft legislation to go before lawmakers when they return in May, the Joint Revenue Laws Study Committee wants the North Carolina Revenue Department to prepare an annual report of all incentives handed out during the year, including itemizing more of the recipients.
The group also wants sunset provisions written into any incentive categories that don’t already have them and to do away with a couple of “obsolete” incentives.
In the past, state officials have prepared separate annual reports on the state’s major tax credits and cash-for-jobs programs, such as the One North Carolina Fund, and the names of the companies and individuals receiving them.
Under the new law, if passed, those individual reports would be merged into a master document. In addition, recipients receiving various other specialized incentives – on energy, mill rehabilitation and low-income housing, for example – also would be disclosed.
…Also under the bill, two incentives – a tax credit written for the unsuccessful effort to lure Wisconsin Tissue, a paper mill subsidiary of Chesapeake Corp., to North Carolina, and a “computer manufacturing” credit worth $226 million given to Dell Computer – would be erased from the books as “obsolete.” Dell has announced it is closing its Winston-Salem plant, idling hundreds of workers.”
Now this is how it is supposed to be done
The News & Observer reported on April 15 that iContact, a local Durham company that provides email marketing services to businesses, is expanding and moving to a larger location in Morrisville. What is so unique about this expansion? The company will not be receiving any incentives! The money was raised from the company’s private investors.
“A rapidly expanding technology company is planning a move to bigger headquarters in Morrisville from its offices in Durham.
iContact, which sells e-mail marketing services to businesses, announced Wednesday that it will relocate to Wake County from Durham in October.
…The private company raised $4.5 million from its existing investors in November to pay for further expansion. Since it started, the company has raised more than $16 million in equity and debt financing.
Unlike some technology firms, iContact doesn't need an initial public offering of stock on Wall Street to raise additional money, Houghton said. He wouldn't rule out an IPO at some point, but the founders still control the company's board and will rely on private investors for now.”
Amusing Incentive Tidbit…
In a recently reported AP article, a St. Louis-based mustache advocacy group called the American Mustache Institute (AMI) is seeking tax breaks for their mustache upkeep…seriously.
“It's time that mustached Americans got in on the stimulus money. At least that's the proposal being pushed by tax policy professor John Yeutter and the St. Louis-based American Mustache Institute. The tongue-in-cheek group dubs itself "the world's only facial hair advocacy and research organization."
On the eve of the deadline to file income tax returns, the professor and the AMI are pushing for a $250 annual tax incentive for people with mustaches. The funds would be used for mustache grooming supplies.
The AMI said the current system "provides a disincentive for the clean-shaven to enjoy the mustached American lifestyle."
The AMI said the stimulus money could be used not only for trimming instruments but for wax, combs and mirrors.”