RALEIGH — Legislative leaders will boost tax-paid subsidies available in the $23.9 billion 2018-19 budget proposal to induce multibillion-dollar corporations to locate in the state.
House Speaker Tim Moore, R-Cleveland, and Senate leader Phil Berger, R-Rockingham, announced a five-point grant and tax credit plan to reporters Thursday, a day after notifying the Republican Caucus of their intentions. They said Gov. Roy Cooper was apprised of the changes and was supportive.
They downplayed any potential friction with party members who oppose using taxpayer money to pick winners and losers in the market. They said the plan just modifies existing programs.
Moore said he opposes simple tax giveaways, and characterized the proposed changes as building blocks. He said such approaches are used in other states, citing the economic revitalization ignited by BMW putting an automaking plant 45 minutes from his home in Greenville, S.C.
The plan would:
* Enable a company that invests at least $1 billion and creates at least 3,000 new jobs in North Carolina to be eligible for a transformative project award under the state’s Job Development Investment Grants program, commonly referred to as JDIG. The thresholds are based on research conducted by the General Assembly’s economic team to determine the level at which a major corporate relocation will have an immediate positive impact on state revenue.
* Allow transformative projects to receive credit for “expansion positions” above the 3,000 job minimum. That would encourage companies to grow beyond an initial jobs commitment.
* Lengthen the base period for transformative projects to 10 years, with a maximum JDIG term 30 years beyond that. Companies considering North Carolina would thus have more long-term certainty.
* Eliminate the $6,500 grant cap per job for transformative projects to help attract higher-paying jobs. Those grant incentives would not apply to foreign workers holding H1B visas.
* Modify the subsidy to high-yield and transformative projects so that 10 percent of that money is directed to the state Utility Account to ensure statewide impact. The Utility Account fund supports economic development projects in rural North Carolina. Previously, the company received 100 percent of the incentive.
Berger and Moore said the modifications already are baked into their $23.9 billion spending proposal. Members of the Senate Finance Committee had varying responses.
Sen. Jerry Tillman, R-Randolph, co-chairman of the Finance Committee, praised the proposal in a newsletter to his constituents.
“We believe this change to our business incentives is the final piece of the puzzle that is needed to put us over the top when it comes to recruiting thousands of new jobs and billions in new investment to our state,” Tillman said.