House Bill 2 could cost N.C. $5 billion a year, report says

Rep. Chris Sgro introduces North Carolina 'Equality for All' bill

Rep. Chris Sgro speaks about House Bill 1078, the new bill democrats are pushing to overturn House Bill 2, Wednesday, May 11, 2016, in Raleigh.
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Rep. Chris Sgro speaks about House Bill 1078, the new bill democrats are pushing to overturn House Bill 2, Wednesday, May 11, 2016, in Raleigh.

North Carolina’s controversial House Bill 2 could cost the state almost $5 billion a year, according to a report Wednesday from the Williams Institute, a UCLA School of Law think tank that focuses on sexual orientation and gender identity law and public policy.

Most of the economic hit would come from the loss of federal funding, since the U.S. government has said HB2 is a violation of the U.S. Civil Rights Act and Title IX.

The report, however, also took into account the loss of business investment, reduced travel and tourism, the costs of litigation and enforcement, as well as costs associated with high school dropouts, workplace discrimination, health disparities, productivity loss, retention and recruitment.

The report estimates that HB2, which Gov. Pat McCrory signed into law March 23, affects an estimated 336,000 LGBT individuals statewide.

The law requires transgender people in public places to use bathrooms that correspond with the sex on their birth certificates. It also prevents local governments from banning discrimination against LGBT people in employment and public accommodations.

HB2 has drawn criticism from major corporations like Bank of America and PayPal, which canceled plans to expand in Charlotte; performing artists who have canceled their N.C. shows; conventions moving out of the state and at least five states and 21 cities that have banned government-funded travel to North Carolina.

“This is a left-wing report produced in California, and an obvious attempt to smear North Carolina,” said Ricky Diaz, a spokesman for McCrory. “It will only be bad for the economy if (Democratic gubernatorial candidate) Roy Cooper and his far-left allies from Washington, D.C. to California continue to smear the state and try to trash the state’s economy for their own political gain.”

Here are some highlights from the report:

▪ There are about 250,000 LGBT adults in North Carolina, including 90,000 in Charlotte. Of those total LGBT individuals statewide, about there are an estimated 22,200 transgender adults, according to the report.

▪ There are another 86,000 LGBTQ youth, including 15,600 transgender youth, in North Carolina between the ages 13-19. Over 41 percent of those in high school have “seriously considered” suicide.

▪ North Carolina faces a $4.8 billion loss in federal grants and contracts, mainly stemming from the $4.7 billion in funds for public schools, colleges and universities.

▪ Researchers estimate that $40 million in business investment, as well as 1,250 jobs, have been lost because of the law. Another $20 million and 550 more jobs are at risk, according to the report.

▪ Because of government travel bans and the loss of private tourism, North Carolina also will likely lose sales tax revenue, according to the report. In 2014, travel spending statewide generated an estimated $1.7 billion in state and local sales tax revenue.

▪ HB2 could make it harder to recruit young talent from outside North Carolina, according to the report. Over 70 percent of millennials support marriage equality.

North Carolina repealed HB2 in 2017 but left intact some of its provisions. But with Charlotte’s reputation tainted, the city is still paying to market itself to visitors.

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