Supporters of corporate welfare have run wild again

Thursday, September 13, 2007

By Scott Sexton
JOURNAL COLUMNIST

Hold on to your wallets, folks, it looks like another long, expensive ride.

Though it had showed some signs of slowing in the past week, the corporate gravy train engineered by our elected officials appears to be picking up steam again.

In case you couldn’t follow the convoluted logic coming out of the General Assembly this week concerning the latest round of economic incentives for private companies, let’s boil it down to its essence.

The honorables decided Tuesday to create a new incentives program through which the government will hand out as much as $60 million of your money to two Fortune 500 companies (Goodyear Tire & Rubber Co. and Bridgestone Firestone) that are already operating in North Carolina to help the poor babies upgrade their manufacturing plants.

As bad as that sounds, the real kick in the pants comes in the fine print: Not only do they not have to guarantee the creation of any new jobs, they can ax up to 20 percent of their existing workers and still collect the cash.

Call it what it is: Corporate welfare paid for by working stiffs. When will the madness end?

“That’s the $64 question,” asked Bob Orr, a former chief justice of the N.C. Supreme Court and current Republican candidate for governor. “It’s nuts.”
A voice of dissent

Lest anyone think that Orr is just another Johnny-Come-Lately candidate looking to score some cheap political points, let’s consider his background.

Orr wrote the dissenting opinion in a 1996 state Supreme Court decision now infamously known as the Maready case. In a nutshell, that court decision opened the gate for legislators accustomed to rolling in pork to start throwing money at a new target - private companies.

The suit was brought by Bill Maready, a Winston-Salem lawyer, on the grounds that $13.2 million in incentives provided by Winston-Salem and Forsyth County between 1990 and 1995 amounted to giving public money to private entities, which he thought was forbidden by the “public purpose” clause in the N.C. Constitution. Orr was one of two justices (out of seven) who apparently bothered to read the document before voting.

But the new deal offered by the General Assembly is far worse.

“This latest expansion goes beyond anything contemplated in Maready,” Orr said, allowing for the argument that incentives have some public benefit by way of jobs. “We’re not talking about a company moving into the state like Dell did.

“This takes it to an entirely new level and what I think is particularly offensive is that these multibillion-dollar companies can cut jobs and still qualify. It’s a huge slap in the face to businesses across the state who don’t qualify.”

‘Wide open now’

For the longest time, it appeared that Orr was a lone voice howling in a political wilderness populated by legislative sprites who believe that a liberal sprinkling of public cash to big private companies is just the ticket to promote economic growth.

Few, if any, locals objected when Dell Inc. came calling on the state, city and county with its hand out.

Winston-Salem and Forsyth County both ponied up; Greensboro and Guilford County were poised to do the same.

So it came as a mild surprise last week when Guilford County commissioners turned down a $1.03 million ransom demand, er, incentives request, from RF Micro Devices.

“Isn’t that the company that keeps coming back for more?” Orr asked.

Indeed it is. Guilford commissioners had already forked out $4.3 million to RF Micro from 1999 through 2004, so they must have figured that enough is enough.

Still, does the fact that one request was rejected and the fact that Gov. Mike Easley vetoed the first version of the latest $60 million giveaway signal a crack in elected officials’ support for incentives?

“It’s hard to figure out what’s going on,” Orr said. “The barn door is wide open now.