Following on the heels of North Carolina’s dismal showing in the Tax Foundation’s business tax climate index, corporate welfare mag Site Selection once again picks North Carolina as the best state to solicit welfare from gullible corporatist politicians business climate in the US.
Naturally, the governor’s office couldn’t wait to tout this ranking (although I am still waiting for their press release discussing the Tax Foundation’s ranking). I’ve previously written a breakdown of Site Selection’s methodology, and detailed why it doesn’t reflect a state’s true business climate, but rather praises those states most active in corporate welfare bribes. Only a true corporatist – interested in a merger of state and corporate power at the expense of everyone else – could be proud of sitting atop Site Selection’s list.
A couple of questions must be answered when trying to justify the Site Selection ranking: if NC has such a great business climate, why did it rank a lowly 35th in terms of private sector job growth over the last decade; and why must the Governor continue to bribe companies to locate here?
Re: “a lowly 35th:”
1) Fun fact: correlation does not imply causality.
2) Even more fun fact: the report you link to through the “lowly 35th” has the neat statistic that NC added “the third most state workers in the nation,” which is a misleading statistic (you mention the accurate statistic — percentage increase — in the next point; why not leave out the first, misleading point?).
3) Another point you fail to highlight (back to correlation and causality): we’re #5 in state worker growth. The 4 states that had a higher percentage growth? ALL had higher private-sector growth (two were in the top three — Wyoming & North Dakota). Ah, but that’s hard data that contradicts the conclusion you drew before you looked at the data, isn’t it?
4) Let’s probe a little deeper. Let’s assume that all of the growth is due to having good, conservative politics. So let’s look at where our most conservative neighbors (who aren’t in oil/gas) fare — namely, SC, GA, TN, AL, and MS. They all absolutely had lower public sector growth — AND lower private sector growth (or, since we’re comparing Jan ’00 to Jan ’10, they all had larger decreases). In fact, *every* state that shed more private sector jobs had *lower* public sector growth. Curious that you didn’t mention that in that article — nor refer to it here.
So — why *did* NC rank so very, very far behind states with well-established oil & gas exploration industries (oh, wait: that blatantly-obvious explanation doesn’t have anything to do with an anti-tax argument; nevermind). Ok, then — why *did* NC rank so very, very far behind, say, NM, AZ, and others (ignoring the major continuing job losses we’ve had from the hemorrhaging textile, furniture, & tobacco industries — oh, right, that’s still completely separate from any obvious anti-tax argument; damn those pesky facts).
Fine: let’s try this question on instead: why did NC (-0.8% job growth) rank ABOVE its neighbors (and economic cousins)? A list:
– SC (-1.1% job growth — with Republican gov. Mark Sanford, the App Trail Tangomeister, since 2003! How’s that working out for them?)
– VA (-1.1%)
– KY (-1.8%)
– GA (-3.7% — and with both a Republican executive and legislature since 2005, too! How’d *that* happen?)
– AL (-3.9%)
– TN (-4.1%)
– MS (-9.0% – Haley Barbour for President, right?)
End result? Yeah, we have a larger increase in state government — and a LOWER job loss rate than any of our neighbors or economically-similar states. We also have the most consistently Democratic government of all of them. Thus, you suggest … we emulate *them?* ‘Cause we surely ain’t gonna suddenly become an oil/gas mecca like Alaska (top of the private-sector job growth list).
Data source: .xls file downloaded from http://www.nccivitas.org/media/publication-archive/policy-brief/ranking-north-carolina-s-21st-century-job-growth (i.e., your own friggin’ data)
Twicker,
Way to avoid the main questions I posed in my post.
I guess its safe to assume that you are a fan of corporate welfare?
Brian: you guess wrong. :) I hate corporate welfare (and am opposed to taxing corporations, but that’s a separate discussion). There *are* places where I believe judicious use of government funding can help (more on that if you want); giving money to Company A (e.g., Dell, Apple, etc.) just because they’re big.
As to why I avoided answering the questions you posed, I’ll turn the question and ask why you, the author of said post, avoided the same question? And, if the Tax Foundation’s rankings are so perfect for economic growth, why did all our neighbors rank above us in the Tax Foundation ratings and *below* us in job growth? (IMHO: I don’t think the answer can be found with the Tax Foundation numbers — they’re pretty meaningless, much like the Site Selection numbers)
Oh – and I posted here instead of at your “lowly 35th” article because I didn’t want to bother registering. I’ll take care of that eventually.
Twicker,
I posed the question for those who claim that NC has such a superior business climate, in spite of the poor job record.
Do you care to answer or not?
Well, let’s see: the job record, by your numbers, is better than:
(a) Virginia,
(b) South Carolina,
(c) Georgia, and
(d) Tennessee
All of whom “beat” us in the Tax Foundation report you used to disparage NC’s numbers. Then again, I’m not a fan of the site selection numbers, so I don’t feel an overwhelming need to justify them.
However, as I’ve pointed out elsewhere, 9 of the 5 states below us in the Tax Foundation rankings beat us when looked at using the exact same job growth numbers you use to disparage NC’s rankings. As I haven’t justified the Site Selection rankings, you haven’t justified … well, you haven’t actually justified your use of that number to disparage NC. Again: compared to our neighbors, the Tax Foundation numbers prove nothing.
To paraphrase The Princess Bride, you keep using those numbers. I do not think they mean what you think they mean …
(sorry — forgot to include my name/email over to the left when I made the post above. But I’m guessing you knew who it was anyway … )
So, you are choosing not to answer the question. Fair enough.
And because you continue to avoid making any direct point, I will go ahead and assume the point you are trying to make is that the TF rankings have little value.
I beleive they do. For, as you agreed, higher tax rates stunt economic growth more so than lower tax rates. Therefore, it offers some value to examine the relative burden placed on businesses by various state taxes. Agreed?
Nobody’s making the claim that the TF rankings somehow offer a 100% accurate predictor of economic performance. All I mentioned is that the TF rankings and SBEC rating for NC more closely resemble NC’s job performance over the last decade than the Site Selection ranking.
Are differences in tax rates among the states significant enough to have a noticeable impact on comparable economic growth? Much of the academic literature suggests that it is.
And to expand on the analysis of the TF rankings, of the top 10 in their climate, only one had negative private job growth over last 10 years, many of them experience double-digit positive growth. Of the bottom 10 in the TF ranking, only four had positive private job growth.
Again, not perfect, but not valueless.
Simple point being, lower tax rates would be better for job growth than higher tax rates.