SCOTT MOONEYHAM: Incentives: No Easy Answers

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I've never had much of a desire to fill those shoes. It's far more fun to throw the rocks.

Nonetheless, it can prove an interesting exercise to think about what you would do -- truly and without an immediate, knee-jerk response -- if you sat in a seat of political power. Placing yourself in one of those seats might prove especially insightful when the legislature debates economic incentives.

There's no reason to bandy about artfully on the subject. Handing out tax money and tax breaks to companies in order to persuade them to build in one state or one community over another is ugly. In reality, it's nothing but legalized extortion.

But a corrupt Congress has shown no interest in blocking states from engaging in these incentive wars. Indeed, bills were filed in both the U.S. House and Senate to try to legislatively overturn a Sixth Circuit U.S. Court of Appeals decision that would have voided incentives offered in Ohio. The U.S. Supreme Court, in one of those courageous rulings that will stand out in jurisprudence history, ultimately dismissed the case on a technicality, finding that mere commoner taxpayers had no legal standing to challenge.

(The argument for national legislation to protect incentives seems to be that an unfavorable court ruling would disrupt markets and penalize shareholders. Penalized taxpayers apparently don't matter.)

But despite the ugliness, consider North Carolina legislators' plight when the issue was recently before them in the form of incentives for film companies.

Last year, state lawmakers had approved a 15 percent tax credit on the total investment of film and television production companies. This year, they realized that the wording of last year's law left the credit subject to corporate taxes, meaning it really only amounted to an 8-percent credit.

During debate to "fix" the credit, incentive critics made the typical arguments against approval.

As usual, Rep. Paul Luebke, a Durham Democrat, led the charge. But he didn't stop with the "incentives-are-pure-evil" spiel. In a novel twist, Luebke noted that even with the fix, North Carolina's film incentives would be below those offered in many states.

That's right. At 15 percent, North Carolina is actually doing less to lure movie production companies than many other states.

But Rep. Carolyn Justice, a Pender County Republican, told her colleagues that those others states' aggressive incentives are why North Carolina can't disarm.

"Incentives are like nuclear weapons," Justice said. "If everybody has got them, then you're forced to have them."

So. You're in the seat. What to do? Take the principled approach, like Luebke, and perhaps cost the state jobs? Or hold your nose, like most legislators, and vote for them?

Better you than me.

Scott Mooneyham writes for Capitol Press Association. Contact him at smooneyh@ncinsider.com

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