Corporate Welfare Bonanza: How Much Taxpayer Money Is On The Lure to Bait Amazon?

RALEIGH – You may have heard that Amazon, the online retail + everything company based in Seattle, Washington, announced they are looking to build a second headquarters and asked for everyone’s best pitch a few weeks ago.

Well, with just a couple days before those pitches are due, North Carolina economic developers are falling all over themselves to attract the business giant to the Old North State.

Multiple sites have been presented to Amazon, from the Research Triangle Park, to the Triad, to sites in Charlotte.

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The proposed headquarters would be a huge get for economic developers – $5 billion investment and up to 50,000 jobs – but how much potential taxpayer funds will be used to sweeten the pot enough to attract the Amazon HQ2?

With myriad economic incentive programs made up of rebates, credits, infrastructure freebies, such a huge “win” by the economic development community would likely mean a huge gift to Amazon from North Carolina taxpayers.

After all, Amazon listed financial incentives as one of its criteria in selecting the location of its new headquarters.

We learned recently that North Carolina offered Foxconn, a mobile phone manufacturer, a package totaling $570 million. North Carolina lost out to Wisconsin, who offered the company a budget busting $3 billion + in incentives.

An Amazon offer would likely require significantly more than Foxconn because the scale of its planned headquarters is so large. Why should North Carolina businesses and taxpayers be forced to pick up the tab for billions in economic incentives for one company? Why do politicians have the ability to offer our money to lure companies with special tax breaks? If it’s good for corporations, why not offer us the same deal?

Luckily, North Carolina is not the craziest state when it comes to incentives, and so others are likely to out bid us on that front. Unfortunately, losing such a ‘whale’ of an opportunity will likely result in Big Government champions wailing that North Carolina needs to step up its incentive game at the expense of middle class wallets and purses.

To be sure, North Carolina is a great place to locate a business because of all the conservative policies enacted in the last several years – low taxes, robust workforce, top notch quality of life – not because of ‘Corporate Cash Giveaways’, as Roy Cooper used to say on the campaign trail.

I say, ‘used to’ because Cooper is now apparently ‘A O.K.’ with giving away money to corporations hand over fist. Americans For Prosperity highlighted recently that he has racked up over $125 million in giveaways in just his first year.

Multiply that number by at least a factor of 10 to get an idea of what a corporate welfare offer to Amazon would look like.

But the dirty little secret is this: As economic developers and hopeful ‘Ribbon Cutters’ salivate over luring Amazon with taxpayer money, according to sources close to the decision North Carolina isn’t even on their radar! Allegedly the short list includes Atlanta, Washington D.C., and possibly Boston.

Their loss; we have a great state with a bright economic future due to sound fiscal and conservative tax policies. But it might just be a taxpayer win, because no matter how much kudos politicians and economic developers would get for landing Amazon, taxpayers don’t deserve to be on the hook for a corporate welfare bonanza.

 

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