When you play the crony corporate welfare game, don’t be surprised when companies spurn you for sweeter deals elsewhere.
The Triangle just lost out on a sizable chunk of Cree’s $1 billion planned expansion project.
Cree’s CEO Gregg Lowe said the Durham-based tech firm had originally planned to invest all the funds in Durham when it announced the project this May, building a “megafactory” that included a new chip plant alongside a materials factory.
But in a sudden turnaround, the semiconductor and LED firm has decided to ditch plans for the chip factory in the Bull City. Instead, it will build it in Marcy, New York as part of its drive to increase production of silicon carbide chips.
Why the change in, ahem, heart from Cree?
In the end, Lowe said, it largely came down to incentives. “It was substantially important,” he told WRAL TechWire by phone on Monday afternoon, hours after the decision was announced earlier in the day. The state of New York offered a $500 million grant, allowing Cree to build a larger facility – “around 25 percent bigger — “at a lower net cost.”
This should come as no surprise, because Cree has a history of going to the highest bidder. North Carolina politicians bribed Cree with taxpayer dollars back in 2004 to expand in the Triangle.
This game of political bidding for corporations using taxpayer dollars leads to a culture of corruption, creates an unfair business environment, and is bad economics as well.
Its beyond time for North Carolina to get out of the crony corporate welfare game. A far better option would be to eliminate the state corporate income tax. When all companies enjoy a zero tax rate, the playing field is leveled and there’s no need to dole out taxpayer dollars to politically-connected corporations.
