North Carolina Gov. Roy Cooper says taxpayer-funded business incentives are generally a good thing for the state. | Office of North Carolina Governor/Facebook
North Carolina Gov. Roy Cooper says taxpayer-funded business incentives are generally a good thing for the state. | Office of North Carolina Governor/Facebook
Documents from the North Carolina Department of Commerce show VinFast considered 29 sites in 12 states before selecting North Carolina and the Triangle Innovation Point megasite near U.S. 1 in Chatham County.
Luring such companies, however, isn’t an inexpensive proposition. In this case, the state promised VinFast as much as $1.2 billion in incentives to build a plant in Chatham County, according to a CBS 17 report.
“Most of it is for needed road improvements for water and sewer and for site preparation,” Gov. Roy Cooper told CBS 17. “This makes sure that we can get to the table to be able to attract a company like this.”
VinFast plans to invest about $4 billion in the plant and will create 7,500 jobs, with an average salary of about $51,000, the report said. State officials said the incentives are dependent upon the company meeting its goals in terms of job creation and pay.
North Carolina State University economist Mike Walden described the purpose of offering incentives.
“Incentives are really a lowering of the tax burden where they look at the cost of that versus the benefits of bringing in more money, more jobs, more payroll,” he said in the report. “Bringing more activity, which of course, is going to generate more activity for the state. So, the state is very deliberate about examining these incentives packages and making sure they do pay off for the state in the long run.”
Jon Sanders, an economist at the conservative John Locke Foundation, wonders if the payoff will ever come.
“They (the incentives) just seem to be getting bigger,” he said. “But these things are lasting for decades and decades and we’re just going to compile them one on top of the other, where are we going to be four decades from now?”
Guidelines are in place to ensure program compliance, said Commerce spokesperson David Rhoades.
“Occasionally, there are cases where a company comes back to us and reports they have fallen short of their targets, or perhaps have been unable or unwilling to submit the required compliance information to us,” he said in the report. “In those cases, the company will most often ask us to terminate their grant.”
Microsoft and Sonic Automotive are among those companies that did not meet their objectives, the report found. Neither had even received the first installment of their incentive package, Rhoades said, and the incentives were nixed.
Still, the companies did create some jobs in North Carolina, so, incentives are a bet the state is willing to make.
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