N.C. Commerce Secretary pushes incentives plan in Charlotte

John Skvarla III
John Skvarla III ehyman@newsobserver.com

N.C. Commerce Secretary John Skvarla called on the state Senate to pass an incentives bill that would provide tax breaks to companies relocating to the state Wednesday at an event in Charlotte, saying the bill is imperative for the state’s growth.

Meanwhile, Senate leaders are set to unveil their own economic development bill Wednesday afternoon, at a press conference in Raleigh with Senate President Pro Tem Phil Berger.

The state’s tax incentives program, which is currently tapped out, has become a bone of contention between Gov. Pat McCrory’s administration and Senate Republicans. McCrory and Skvarla say incentives are necessary to compete for jobs with other incentives-heavy states in the Southeast.

Senate Republicans, on the other hand, have balked at what they characterize as corporate handouts, and signaled they instead favor plans to lower corporate taxes. On Tuesday, Skvarla faced a skeptical Senate panel that voiced little support for McCrory’s plan, which the state House has already passed.

Speaking Wednesday afternoon at the Central Piedmont Community College Global Competitiveness Summit, Skvarla said the McCrory administration favors lower taxes too – eventually. For now, he said the state must have millions more worth of incentives to compete with other states.

“It’s a highly competitive world,” said Skvarla. “The whole world knows that North Carolina is out of business.”

The state’s main incentives program, the Job Development Investment Grant, has run dry. The program won’t have more capacity to offer incentives until July. McCrory’s plan, as adopted by the House, would increase the JDIG cap from $22.5 million to $45 million, extend the program for five years, and extend tax breaks for jet fuel and technology data centers.

“As far as recruiting an 800-pound gorilla, we have nothing to offer now,” said Skvarla.

He accused the Senate of being more ideologically driven, and less pragmatic than McCrory and the House. The Senate’s tax ideas could cause a revenue shortfall totaling hundreds of millions of dollars, without revenue to replace that or government efficiencies to make up the gap.

“It’s impossible to just flip the switch and make that happen...The Senate seems much more aligned with an ideal,” said Skvarla. “They believe if they can create that ideal immediately, build it and they will come.”

Skvarla said he will rally business leaders and economic developers – who made up much of the audience Wednesday – to pressure the Senate to pass the incentives plan. The audience at CPCC’s Harris Conference Center cheered at the call to contact state legislators and voice their support.

He urged the audience to contact “the Big Four” Senate Republicans, naming Berger, Bob Rucho of Matthews, Tom Apodaca of Hendersonville and Harry Brown of Jacksonville. Skvarla quipped that they make up “the Holy Trinity, plus one.”

Without incentives, Skvarla said the state risks losing out on company relocations. South Carolina has recently lured a string of companies that were either from Charlotte or considered North Carolina.

“South Carolina, best I can tell, is kicking our butt,” said Skvarla. “They’re not stupid...They’ve been inordinately aggressive.”

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