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Report Examines North Carolina Economic Incentive Programs

PHOTO: The North Carolina Justice Center says 60 percent of projects funded by the Job Development Investment Grant (J-DIG) Program have failed to deliver the jobs they promised. Photo credit: Innov8Social/Flickr.
PHOTO: The North Carolina Justice Center says 60 percent of projects funded by the Job Development Investment Grant (J-DIG) Program have failed to deliver the jobs they promised. Photo credit: Innov8Social/Flickr.
February 17, 2015

RALEIGH, N.C. - A bill is expected in the State Assembly as early as this week for a new jobs plan at the urging of Governor Pat McCrory.

However, the bill comes on the heels of a new report from the North Carolina Justice Center that indicates 60 percent of job projects under the Job Development Investment Grant (J-DIG) program have failed to deliver what had been promised.

Study author Allan Freyer, director of the Worker's Rights Project with the North Carolina Justice Center, questions the allocation of additional funds.

"If there were any other program in state government that failed 60 percent of the time, the Legislature would have eliminated it already," says Freyer.

The J-DIG program has a spending cap of $22.5 million annually. Recently, more than half of that money was awarded to MetLife in Charlotte, which Freyer says reduces the availability of funds for smaller companies in rural communities where jobs are badly needed. The report says 90 percent of J-DIG dollars have gone to urban communities, while more than 77 percent of projects approved in rural communities have failed.

Supporters of the J-DIG program say it enables the state to compete for new projects or expansions with existing employers. The money is not awarded to companies until they fulfill their promise of added jobs, but Freyer says the money for J-DIG is still a line item in the budget and cannot be allocated to other proven programs.

"It's less money that's available for the real building blocks of economic growth like education, job training, industrial and transportation infrastructure," he says. "These are the types of investments that actually promote broadly shared economic growth that benefits everyone in the state."

The report recommends the state examine why so many incentive programs are failing, improve the evaluation process before projects are approved, and focus incentives in industries predicted to experience the largest growth.

Stephanie Carson, Public News Service - NC