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Corporate welfare program continues to benefit wealthy counties, awards another $624 million in 2020

North Carolina’s largest “economic incentive” program continued to favor the state’s already wealthy counties, according to a new report.

The Job Development Investment Grant (JDIG) program is North Carolina’s premiere corporate welfare program, doling out hundreds of millions of dollars in targeted tax breaks to politically-selected companies. It’s the program largely responsible for the massive Apple deal announced last week.

The Commerce Department just released its 2020 report on the program, (Read Here) which included some key data:

  • Of the 27 grants awarded in 2020, more than half (15) went to Tier 3 counties. For programs like JDIG, counties are designated by 3 “tiers.” Tier 1 counties are the 40 most economically distressed, the next 40 are tier 2, and the 20 most economically well off counties are tier 3. Seven of the grants were awarded to companies in Durham County, with 3 going to Mecklenburg and one to Wake. The rich get richer, off the backs of small businesses and hard-working taxpayers left to foot more of the state’s tax bill.
  • Total awards could add up to $624 million over 39 years. About $587 million of that is for projects in Tier 3 counties.
  • Far and away the largest award went to Centene Management Company, for its project in Mecklenburg County. Centene could receive tax breaks of up to $388 million over 39 years. Centene is a healthcare administration company, and listed as among the top 50 largest companies in the nation. With roughly $75 billion in revenue, they ranked larger than Disney, Pepsi, Facebook and Procter & Gamble. Thank goodness the state granted them a massive tax break while small businesses across the state were forcibly closed by Gov. Cooper.
  • From 2003 to 2020, JDIG has granted awards that could total up to $1.6 billion in tax breaks over the life of the awards.

Programs like JDIG are not only unfair because they grant certain companies political privileges that provide them with a competitive advantage, they also have a poor track record. As my colleague Jon Sanders wrote:

News analysis found that from 2009 to 2016, JDIG and OneNC awards resulted in just over half the expected jobs. About 37 percent of incentivized companies failed to create even a single job. These poor results were in keeping with established research into corporate incentives, as well as forthcoming new research.

Brian Balfour / Senior Vice President of Research

Brian is Senior Vice President of Research at the John Locke Foundation