North Carolina ED Strategy Under Fire

Most states are under fire for not being able to get enough economic development results at this time. That is the case in North Carolina, which has met with hostle fire from the business community and local government officials. Some think North Carolina is living off its laurels of the 1980s. State development officials claim otherwise. Regardless of who is right, this is "rethink" time for North Carolina economic development.

Three suggestions on how to improve state economic competitiveness seem to be getting the most attention right now:

* Lower Taxes: A study by N.C. State University economist Michael L. Walden said North Carolina has the second-highest tax burden in the Southeast. Twelve years ago, it had the third-lowest. Reducing taxes would lure businesses, development officials say.

* More Tax Breaks: A study by site-selection consultants at Fluor Corp. in Greenville, S.C., said North Carolina's incentives package for new businesses is the best in a 13-state region stretching to Texas and Oklahoma, but only if a business qualifies for its Job Development Investment Grant.

The grant offers businesses rebates of up to 75 percent of the state income taxes paid by workers in new jobs. Only 15 businesses can qualify annually. Without the grant, the state drops to third-worst of the 13 states, according to the study.

* More Attention to Science and Technology: Long regarded as an innovator in this field, the state has become complacent and is losing ground, some fear. Jane Smith Patterson, science and technology adviser to former Gov. Jim Hunt -- a position that doesn't exist under Easley -- points to rivals such as Georgia, which spent $300 million during the past three years to create jobs with university-driven research.

The debate is likely to go on for a while. My thought is that neither old or new strategies are going to have much impact until the national economy gets back on track and businesses have enough confidence to make new investments. In my judgment, North Carolina has done an effective job at economic development over the past couple decades. Yes, there is always room for improvement, but North Carolina leaders need to recognize and appreciate the solid economic progress they have made. That is the starting point for crafting a better future strategy.

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