Orr tries to mine political gold on incentives issue

By Barry Smith

October 10, 2007

RALEIGH — Republican gubernatorial candidate Bob Orr could be on to something.

The other day he proposed a change in policy in the way the state does business when it comes to handing out economic incentives, which is sometimes referred to as corporate welfare.

Orr, a former N.C. Supreme Court Justice, called the current system of corporate incentive handouts “fundamentally flawed.” He called for restructuring the way the state uses the public purse to recruit industry.

Orr is expected to face Salisbury lawyer Bill Graham and state Sen. Fred Smith of Johnston County in next year’s GOP primary. The winner of that primary will likely face either Democratic Lt. Gov. Beverly Perdue or Democratic state Treasurer Richard Moore in next year’s general election.

“We must stop the practice of handing out incentives based on the influence of corporate lobbyists, eliminate state discretionary incentive awards and end the competition to attract businesses among our communities,” Orr said.

Orr also said he would work with the North Carolina congressional delegation to seek federal legislation that would crack down on the states offering such sweet-deal incentives. He also wants to work with regional governors, the National Governors Association and the National Conference of State Legislatures to address the issue.

Finally, someone with a high profile is taking a step which could lead to Congress banning all the high-dollar corporate incentives battles among the states.

For years, I’ve heard some legislators complain about the dilemma they feel like they’re in. They say that they don’t like the corporate incentives game. But they feel that if they don’t play the game, they’ll lose industries to other states that are putting up big bucks.

While I occasionally hear some legislators complain, I rarely see any action to pursue a change on the federal level. I don’t remember the General Assembly passing any resolution encouraging Congress to ban them. Certainly, there’s been no major push from the governor’s office to effect such a change.

I think part of that is because if the governor couldn’t offer incentives any more, he wouldn’t be able to tout how his incentives package helped land a new industry.

If new businesses located or expanded to North Carolina, it would be because they liked North Carolina’s economic and business climate, or maybe just because they like our climate, period.

Orr tends to favor targeting the use of tax dollars toward workforce training rather than tax incentives or direct cash payouts.

He appears to be taking the lead in coming up with a different direction for economic incentives. His challenge will be selling that to the North Carolina public as he gets further and further into the gubernatorial campaign.

How much do the issues of corporate incentives and corporate welfare resonate on Main Street in North Carolina? Polls tend to show that more people are interested in education and health care than are interested in economic incentives matters.

The justice who would be governor has his work cut out for him when it comes to making incentives a top issue in the 2008 campaign.

Barry Smith writes for Freedom Communications Inc.’s Raleigh bureau. He can be reached at bsmith@link.freedom.com