Once again the Governor’s office and NC Department of Commerce feel the need to celebrate the state’s ranking as most likely to give out corporate welfare by Site Selection magazine.
And once again, I will point the readers to a piece written by our own Brian Balfour that seriously calls into question these supposed rankings as nothing more than a scheme for the seekers of corporate welfare to reward states that generously hand out the checks. From Brian’s piece:
Site Selection’s “best business climate” ranking is actually a measure of which states are engaged in the highest amount of corporate welfare activity. Here is how they develop the ranking: “Fifty percent of the total score is based on a survey of corporate real estate decision makers and fifty percent comes from data associated with actual project activity as tracked by our proprietary New Plant database.”Neither of these criteria are accurate reflections of a state’s true “business climate”:
- Half of the score is based on a survey of corporate real estate decision makers. What do they rank as the most important issues?
- Three of the top ten answers are centered on economic incentives (#5 “Availability of incentives”, #7 “State & local economic development strategy”, #8 “Flexibility of incentives programs”)
- This is the only topic mentioned three separate times. In short, the survey basically reflects which states are most willing to provide corporate handout
- The other half of the score is based on their “new plant database,” a list that tells a very incomplete story:
According to their website, the Site Selection new plant database includes only “projects costing at least US$1 million, covering at least 20,000 sq. ft. or employing at least 50 people.” In other words, projects more likely to have received some government incentives are included, while small, independent business starts are ignored
It must also be pointed out, and especially this year, if North Carolina’s business climate is so good, why is our unemployment at 11% and has been for the past eight years been above the national average? There seems to be some divergence between what the corporate welfare seekers say and what the facts seem to bear out.