Status of incentive programs concerns eco-devo officials

featured_ecodevoMay 8. By Dave Vieser. The shaky status of two corporate incentive grant programs administered through the state have economic development officials concerned about our ability to compete with other areas in attracting new companies. The state Research and Development Tax Credit expires at the end of this year, while the Jobs Development Investment Grant (JDIG) has run out of money and has thus far not been renewed.

“Prospective new companies are passing us by and that concerns me very much” said Margie Bukowski, senior vice president for Cabarrus Economic Development. She says the JDIG grants have been especially useful in bringing new companies into the region.
With legislators in Raleigh seemingly focusing their attention on a host of other controversial issues, some development officers fear that action on the incentive programs has taken a back seat.
“Without these two programs, we will not be competitive,” said Ronnie Bryant, president and CEO of the Charlotte Regional Partnership. “Regardless of one’s philosophical view on incentives, we really need these programs to compete with surrounding states.”
The R&D tax credit is awarded to employers in key industries for investing in technological innovation and creating jobs. The credit may be applied to offset as much as 3.25 percent of research and development costs and up to 20 percent of expenses associated with North Carolina university research programs.
“Without tax credits to attract new businesses and fund more jobs for companies already here, employers in key industries will be less competitive,” said Gary J. Salamino, vice present of the North Carolina Chamber of Commerce. “The R&D tax credit provides an important addition to our state’s economic development toolbox.”
The credit was initially scheduled to expire at the end of 2013, but was extended for two years along with the overhaul of the state’s tax code.
Meanwhile, the JDIG program has run out of money and attempts to revive it in the state legislature have thus far been unsuccessful.
The JDIG program began in 2002, and has been used by state economic development recruiters to enhance offers to companies considering a major investment in North Carolina that would lead to the creation of new jobs in the state. JDIG has typically been reserved for the larger new jobs deals, and pay-outs are held back until companies attain a predetermined job creation goal.
“Without JDIG, the state will not be competitive,” says the state’s former Commerce Secretary Sharon Decker.
Decisions on the tax incentives are part of an ongoing debate in Raleigh concerning how best to promote economic development in the state. Some legislators believe targeted tax breaks, government subsidies, and incentive policies such as the R&D tax credit and JDIG are the most effective. Others frown upon the incentives and prefer to see lower overall taxes, combined with reasonable regulations.


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