Creating Value Practicum was created by the Center for Innovation Management Studies, an academic-industry partnership within the Poole College of Management at NCSU.
Economic incentives have helped companies relocate to the state and others in-state to expand. Jordan discusses three major state-level programs that provide incentives: the Job development Investment Grant (JDIG), One North Carolina Fund, and Article 3J Tax Credits. Other incentive programs beyond the big three are discussed.
Because the state was losing some big manufacturing plants to other states, the North Carolina General Assembly passed the William S. Lee Quality Jobs and Business Expansion (Lee Act) in 1996. This allowed the state to be more assertive in offering financial and tax incentives. Morgan assesses the pros and cons of incentives.
In 1997, the state recruited over 800 businesses that invested up to $50 million each. They created about 60,000 jobs. However, the inability to offer competitive business incentives and tax abatements makes recruiting larger companies hard.
When Nash Community College started its Electric Lineman Technology two-year degree program in 1998, the state became home to the second such program in the country. Kansas was first. The 64-credit-hour degree enhances the lineman's communication, technical, and safety skills.
Since the General Assembly passed the William S. Lee Quality Jobs and Expansion Act in 1996, 21 companies indicated the legislation was instrumental in their decision to relocate to the state. Companies include Corning, Inc. and Polar Plastics.
Because of the William S. Lee Quality Jobs and Business Expansion Act, the state is more competitive with other states in industrial development. The act includes tax credits for companies creating new jobs and engaging in product research.
Economic development incentives, including tax incentives and financial aid, are used by states to attract businesses. Being outbid by other states for companies like Mercedes-Benz has led the state to formulate a policy on incentives.
Major components of the incentives grant program are tax credit programs, including those for worker training; loan and grant programs, including business energy loans; and the Governor's Industrial Recruitment Competitive Fund.
Are business taxes too high? A number of studies, including one by the Peat Marwick accounting firm, report taxes are low; others find the opposite. To attract businesses, the state needs a corporate tax rate that is fair and competitive with other states.
The North Carolina Supreme Court ruled in 1996 in the case of Maready v. City of Winston-Salem that the use of public funds by cities and counties to attract businesses is not unconstitutional.
The state, which was first in the nation in 1992 in attracting new businesses, was replaced by Ohio from 1993 to 1995, and faces increased recruiting competition as other states become more aggressive in using business incentives.
A partnership between such governmental agencies as the North Carolina Division of Parks and Recreation and private businesses like Carolina Power and Light Company is producing ways to protect the state's natural resources and environment.
To bring companies and jobs to their area, competing cities sometimes offer attractive incentives, like use of a speculative building. While this can be a sound business approach, it can also be detrimental, creating costs that have not been budgeted.
Although the 1995 General Assembly reduced funding for regionalism, grouping the state's one hundred counties into seven consortia, the Commerce Department still sees it as an effective way to recruit new industries.