N.C. Senator Ellie Kinnaird's Newsletter

October 9, 2011 Newsletter

Dear Friends,

Ellie Kinnaird

Greetings from the North Carolina Senate,

This week there was speculation as to why Continental Tire did not choose a location in North Carolina for a large plant. Did we lose out in the bidding war for incentives to South Carolina? Or did they have other advantages over North Carolina? Which raises the question of whether we should be in the bidding war at all for plants by giving large incentives to locate in North Carolina in order to create jobs. I have argued and voted against incentives. I proposed instead that we put that money into our education system. A study by the UNC Kenan Flagler Business School found that the four most important features that attract business are a good transportation system, a strong K-12 education system, a well-trained work force and surprisingly, cultural amenities. North Carolina has an excellent transportation system (although because of underfunding it may not be in good shape for long), and an excellent community college system that trains workers in many areas. We have a mixed bag when it comes to K-12 with uneven distribution of funding and quality. The most surprising is fourth on the list: cultural resources. Why? If an executive is moving his family, besides good public schools, they would like a choice beyond Hardees and McDonalds and the latest shoot-up-car-crashing movies. They prefer an area with good restaurants and a rich arts scene. Which is why, even with the lure of incentives, many of the companies end up in the Triangle, Triad and Charlotte instead of our rural, small towns where they need the employment the most. Where are incentives and tax credits on the list? Number 10. Further, the latest study shows that many of these incentives don’t even create jobs. The original tax credit/incentive packages required that the wages be higher than the local prevailing wage. But last session, the legislature extended an incentive to a company when the wages were lower than the local wages. And then there was Dell Computers that extracted hundreds of millions from the state, Forsyth County and Winston-Salem, to cease most production in just two years.

Last year we extended incentives to the game-creation industry that is growing out of NCSU. Red Hat was a recipient to keep it in NC. An attraction that has developed is the use of our cheap electricity for large data-storing businesses. Contrary to manufacturing, these industries do not create large numbers of jobs. Once built, the facility largely runs itself with most jobs in maintenance and security. Facebook is eligible for $11.4 million, (42 jobs with 50 more with expansion and 250 in maintenance and security) and will use an existing vacant plant in Rutherford County. Google built a $600 million facility in Lenoir and received $4.8 million initially and could receive more than $100 million. Apple is building a $1 billion data center in Maiden in Catawba County and received $21 million from the city and county and $46 million in tax breaks from the state. Time Warner Cable is building a data center in Charlotte that will employ 225 and is receiving $2.9 million in state funds over nine years. What this means is that the taxes that those companies aren’t paying has to be made up somewhere else. That somewhere else is you and me. It’s called tax shifting. Or the legislature can cut services. My question is, are the jobs and subsequent taxes the workers pay, equal to what the state loses in revenues. One argument in favor is that a facility employs people directly, and has a multiplier effect from the stores and services that grow up around it.

Part of an elected official’s activities is attending events sponsored by community groups, often recognition banquets or receptions for their employees, benefactors and volunteers. Sometimes it is to participate in the activities of the organization’s mission such as Meals on Wheels where I will go on a delivery route next week. This Saturday I was invited to attend and say a few words of greeting at the new Dharma Won-Buddhism Mediation Temple outside of Carrboro. The dedication ceremony was attended by the members of the Temple, those who helped to build it, and a large contingent of Buddhist holy people from Korea. Sadly, the architect, John Hartley died last summer, so while he saw the building to completion, he was not there at the ceremony. The Temple is a truly beautiful building full of natural wood, mud walls and native stone from the site, and lots of windows to connect the surrounding woods with the interior. The ceremony was a mix of spiritual chanting and singing, and musicians playing on various instruments, including an interesting double-body reed wind instrument and the first violinist from the Ciompi Quartet. And speeches from the Rev. Wong-Dong So, spiritual leaders from around the world and the Mayor of Hillsborough, Tom Stevens. Following the ceremony we were dazzled by young women dancing a traditional Korean Dance and a delicious meal.

This Sunday I spoke to the Environmental Group at my church, the Chapel of the Cross. The Episcopal Church has a liturgical year that follows readings from scriptures and this month is environmental stewardship month. I’m afraid I didn’t have much good news to share with them on what happened in the Legislature last session. The two preceding talks had been by Orrin Pilkey on what is happening on our coast and Tom Henkle who has a solar energy business.

The Legislature may go into special session to discuss funding for the victims of Hurricane Irene.

Paid for by Ellie Kinnaird for Senate • Campaign Address: PO Box 668, Carrboro, NC 27510 • 919-918-3432
Legislative Office Address: Room 628 LOB, 300 N. Salisbury St., Raleigh, NC 27603 •