The controversial proposed CSX cargo hub in Johnston County is the latest example of how North Carolina state policies still result in de facto central planning.
CSX wants 450 acres on Interstate 95 near Selma for its $272 million intermodal cargo terminal, and it wants DOT to cover $100 million of the project cost…..
And CSX hopes to save millions more by tapping a 50 percent state tax credit reserved for railroads that spend at least $30 million to build intermodal freight terminals – where cargo is moved from one mode of transportation to another. Railroads can slash their franchise or income tax payments by an amount equal to half the money they spend on construction, the WSP Parsons Brinckerhoff report said.
So a state government agency is considering giving $100 million of taxpayer funds to a specific company, while the state tax code contains a generous credit for a specific type of investment. Meanwhile. much of the controversy has centered on the state government using (and possibly abusing) its legal power of eminent domain to force landowners to sell their property (likely at a price determined by state government) to CSX so they can complete the project using land of their choosing.
Multiple layers of government force and favoritism are involved in this deal, with politics – and not economics – largely determining the investment decisions. Would CSX even be considering this investment if it weren’t for the political favoritism? If yes, why is the favoritism needed? If no, then we know that it represents an economically unviable investment of scarce resources, and those resources are more urgently needed in some other means of production.
Time to end the cronyism and political patronage. Create a level playing field and treat businesses the same, enabling the most efficient to thrive instead of rewarding those with the best political connections.