July 31--DURHAM -- Gov. Pat McCrory's top business recruiter fired back Wednesday at legislators who believe state policy is too favorable to cities, arguing that officials have to think regionally and recognize private-sector preferences.
"The world is urbanizing," state Commerce Secretary Sharon Decker told members of the N.C. House Finance Committee. "A lot of times, when companies come to us, they want to be in an urban center, and convincing them otherwise is not possible."
Decker's comments came as the panel reviewed a bill that, among other things, includes a state Senate-proposed cap on local-option sales taxes that could undercut plans for the financing of the Wake County portion of a regional transit system.
But she was specifically addressing a proposed business-incentive program that some committee members -- among them state Rep. Paul Luebke, D-Durham -- worry may be too beneficial to regions like the Triangle.
The program should strengthen the state's hand over the coming decade as it tries to recruit auto and aircraft factories that could have an "exponential" effect on the North Carolina economy because they'd fuel the growth of supply-chain businesses, Decker said.
She specifically argued against excluding so-called "Tier 3" counties -- economically, the 20 best-performing counties in the state, a group that includes Durham -- from the program's potential benefits.
The argument was necessary because Luebke, House Speaker Pro Tem Paul Stam, R-Wake, Majority Whip Mike Hager, R-Rutherford, and Rep. Mike Stone, R-Lee in various ways all questioned their inclusion.
"My feeling, looking at this, is too much of the investment is going to go to the big counties," Luebke said.
Stone added that he believes the state's rural counties are competing with urban areas for new business, their participation in recruiting efforts in many cases only driving up the price of incentive deals that eventually go to Tier 3 counties.
His argument was a partial echo of comments Senate Majority Leader Harry Brown, R-Onslow, made last week in a Senate committee debate in the course of defending the local-option sales-tax cap.
Decker countered that while major manufacturers might find "more rural-oriented communities very attractive," they may well end up picking sites on the edge of major metropolitan areas.
That still helps rural areas, she argued.
"They might choose to go to the rim of a Tier 3 county because they've got access to workers, but if you look at North Carolina's map where that's the case, they would be in easy commuting distance of a number of Tier 1 and 2 counties," Decker said, alluding to the 80 counties that aren't among the top economic performers.
"So we're going to have to start looking in a regional kind of way where a massive plant like this locates, where they can get commuting employment within a 30-minute to 40-minute commute time," she continued.
And philosophically, when it comes to the top-20 counties, "we don't think we should exclude them from the opportunity for growth," Decker told Stam.
Decker said the administration wants to seed the program with $20 million to $30 million and use it to close deals if the prospective return on the state's investment seems favorable enough.
In the top-20, Tier 3 counties, a project would have to generate at least 1,200 full-time jobs, bring at least $50 million in new investment and receive a 9 percent local-government match on the state's contribution to qualify for a subsidy.
Those thresholds are all lower for Tier 1 and 2 counties.
Another legislator, Rep. Yvonne Holley, D-Wake, noted by way of her questions that the bill doesn't include any provisions requiring companies to hire from the community their operations are based in.
Decker made it clear the omission was intentional.
"I think it would be very difficult to get companies to agree to a specific percentage," she said. "We get a combination of new jobs for local people, and some folks that move [to the state] with it. We need to recruit across the whole bandwidth. North Carolina is an in-migration state. That's a plus and a positive."
She added that the state does need "to be growing jobs from within as well."
The committee wound up voting to recommend that the full House reject the Senate draft, a move that would force a between-chambers conference to come up with another one.
That would give legislators, if they're so inclined in the waning days of the General Assembly's 2014 session, a chance to rework both the sales-tax provisions and the structure of the incentive program.
Copyright 2014 - The Herald-Sun, Durham, N.C.