Why North Carolina is losing the biggest battles in the job recruitment war

Chalk up another loss on the economic development front for North Carolina.

Mercedes-Benz, after considering several cities in the state, is reportedly taking its U.S. headquarters to Atlanta. The luxury automaker joins a growing list of prestigious business brands who have thought about moving major operations to the Tarheel State, only to bypass us for other suitors.

Last year, a $107 million offer couldn't land Toyota's U.S. headquarters in Charlotte. They picked Plano, Texas. A whopping $683 million offer couldn't land Boeing's new 777x jetliner plant, which Washington state secured with a massive $8.7 billion incentives deal, then the largest corporate tax break in U.S. history.

Also in the last two years, the state lost out to Lancaster County on a $218 million Chinese textile plant and to Chester County on a $560 million tire plant. S.C. officials offered an incentives deal 10 times larger than North Carolina for the textile project and a deal with tens of millions more in tax savings on the tire project.

Gov. Pat McCrory, left, and Sealed Air CEO Jerome A. Peribere announced last year that the firm will move its headquarters to Charlotte, bringing 1,262 jobs.

Read more here: http://www.charlotteobserver.com/2014/07/23/5061311/another-charlotte-job-announcement.html#.VKwT1yvF9TI#storylink=cpy

To be sure, there have been big job recruitment wins in recent years, such as Sealed Air Corp.'s decision last year to move its headquarters and nearly 1,300 jobs to Charlotte, and MetLife's decision the year before to move about twice as many jobs to Charlotte and the Triangle. Still, there are signs of frustration setting in for Gov. Pat McCrory. He told business leaders at a gathering in Durham Monday that he doesn't have the tools he needs to attract big industry. He's asking for major legislation from lawmakers in the first two weeks of their new legislative session. He's said in the past that he needs a "closing fund" like S.C. Gov. Nikki Haley has for last-minute pot-sweetening, and administration officials have said the state's Job Development Investment Grant fund has been running low.

Clearly, something needs to be done. And Republicans running the legislature, bless their fiscally conservative hearts, haven't shown much appetite for throwing ever-bigger wads of cash at corporate suitors. But rightly or wrongly, job recruiting has devolved into a state-eat-state bloodsport. Either you outbid the competition, or you offer such a superior quality of life and workforce that the money doesn't matter. (Hint: Google and Facebook aren't in California for the tax rates).

North Carolina used to have something like that California approach to economic development. We didn't sweat the bidding wars. We invested in schools and universities to make them among the strongest in the region. We developed a reputation, as the New York Times put it in a 2013 editorial, "as a beacon of farsightedness in the South." Despite a legacy of not offering the biggest pots of money to relocating corporations, we still ranked at or near the top of business climate and job creation lists for much of the past two decades.

Nowadays, we're struggling to keep our teacher pay respectable and keep teachers from leaving the state. Lawmakers have a decision to make: either go all-in on the bidding war, as the governor seems to be asking, or increase funding for the state's true job creators -- its schools and universities. Our recent history suggests the latter economic development model works just fine.

-- Eric Frazier

McCrory: 'I'm not desperate'

Former Mayor Pat McCrory, who's almost certainly going to run for governor again in 2012, calls Daily Views to dispute today's earlier Daily Views post that quotes Chris Fitzsimon about McCrory's role in getting the proposed ethics bill sent back to committee. Nor was he happy with the DV headline: Pat McCrory tries to derail N.C. ethics bill?"

"I'm not against the ethics bill," McCrory said. What he didn't like, he said, was the last-minute addition to the ethics bill which would have expanded the state's public financing program for statewide campaigns to four more Council of State offices and pay for the financing with what the News & Observer of Raleigh, in its news account, dubbed "relatively modest new fees on the businesses and firms regulated by the elected offices involved – attorney general, state treasurer, agriculture commissioner, labor commissioner and secretary of state.
"For example, candidates for secretary of state could have received campaign money through an extra $5 fee imposed when a new corporation is formed."

It's that $5 fee that was the target of some overblown rhetoric, making it sound like a gigantic income tax hit, that you'll hear on this robocall (listen here) taped by McCrory and sponsored by the right-wing anti-tax, anti-health-care-reform, anti-climate-change legislation advocacy group, Americans for Prosperity. The robocalls urging voters to call their state senators succeeded, making enough pols nervous that the public financing measure was expected to be stripped from the bill.

McCrory said he opposes public financing for statewide campaigns. It forces N.C. taxpayers to support campaigns for people they may not support, he said.

As to Fitzsimon's jab that he "is desperately trying to stay relevant until the next election by appealing to the Republican's tea party base," hiz-ex-oner said, "First of all I'm not desperate. And what's wrong with trying to stay relevant?"