Job incentives program should be reformed or eliminated


The Appalachian Online

Kevin Griffin

Although Gov. Pat McCrory has touted job creation as a major priority of his, one of his recent job proposals may be an ineffective means of getting results for North Carolina.

McCrory is asking that the legislature refund the Job Development Investment Grant. The JDIG, which was started in 2002, is intended to give money to companies that have located to North Carolina and meet certain job creation targets, according to The News & Observer.

After almost $300 million in awards to companies under

McCrory, the fund is nearly exhausted.

Now that the governor has brought up the issue, and is asking legislators to continue JDIG, it is a good time to consider whether or not the program should continue as is, face changes or even be eliminated.

Recent reports suggest that we should be focusing on those last two options.

A News & Observer report found that, under McCrory, more than 80 percent of grant money went to wealthier counties such as Wake and Mecklenberg. Poorer, rural counties received less than 10 percent of the funding.

The NC Justice Center presented the even more striking finding that 60 percent of the grants had to be cancelled because of failure to meet targets.

The problems with this program should not be pinned solely on McCrory. He did not start JDIG, and it did not perform well under his Democratic predecessors, either.

However, he is asking legislators to double down on this questionable policy. In light of these findings, those legislators should consider either making changes to the ways grants are awarded. If that cannot be done effectively, then JDIG should be discontinued in favor of some more helpful job creation initiative.

Some have argued that the claims of JDIG failure are overstated.

John Peterson, the Executive Director of the North Carolina Economic Developers Association, made such an argument in a News & Observer op-ed. He pointed out that taxpayers do not lose out on JDIG since grants are cancelled if a company fails to meet jobs targets. Also, the state can force companies to pay back the money they had already been given. He goes on to mention that, although many companies missed their targets, they do still employ people in the state.

While this is true, it misses the point. The issue is not about taxpayers getting ripped off or claiming that the program has done nothing to create jobs.

The point is that the government is making an investment with expectation of certain returns. If it cannot get those results consistently, and the recent report suggests it does not, then it is time to either reform JDIG or to look to other options.

Whether JDIG is reformed or abolished, the program should not continue as it is now.

Griffin, a junior journalism major from Madison, is an opinion writer.