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Executive Summary
Contents
3 Methodology
3 Types of Incentives
3 Performance
3 Non-performance
4 Infrastructure Grants
4 Tax-based Reimbursement
4 Legal Authority
5 Findings
5 Outliers
7 Recommendations
8 Appendix: Details of property
tax reimbursement incentives
The views expressed in this report are solely those of the author and do not necessarily reflect those of the staff or board of the John Locke Foundation. For more
information, call 919-828-3876 or visit www.JohnLocke.org.
2015 by the John Locke Foundation.
Policy Report
Economic Incentives: County by county
Methodology
Types of Incentives
incentives based on their perception of public need. government to offer incentive payments are broadly laid
Gates County discounted the sale of a historic school out in the North Carolina General Statutes.2 According
building that did not qualify for a state building re- to the UNC School of Government,3
use grant. Granville County paid for the renovation
When a North Carolina government turns funds
of an existing building and provided matching funds
over to a private entity for expenditure (through an
for grants from other sources. Rutherford County only
incentive payment), the local government must give
used local funds to match One NC grants. Warren
prior approval to how the funds will be expended
County waived permit fees for private businesses.
by the private entity and all such expenditures
Infrastructure Grants
shall be accounted for at the end of the fiscal year.
Furthermore, the funds must be made subject to
These incentives reimburse companies to meet state
recapture in an incentive agreement. Additional
building code requirements or connect to public utilities.
procedural requirements are imposed when the
These include fire hydrants, roadway intersections,
expenditure involves the purchase or improvement
and sewer and water lines. Brunswick, Currituck, and
of property, which is almost always the case for an
Yadkin counties were the only jurisdictions that solely
economic development incentive that is contingent
used these forms of incentives. Perquimans County
on making investments that increase the property
only had one incentive grant, a discounted sale of eight
tax base.4
acres of county land at $25,000 an acre.
Tax-based Reimbursement
This category includes any incentive that reimburses
taxes paid. Since counties use different methods to
report the budgeting and value of tax-based incentives,
they cannot be fully accounted for until paid. Bladen,
Catawba, Cleveland, Cumberland, Duplin, Durham,
Franklin, Gates, Harnett, Johnston, Pitt, Richmond,
Rowan, Scotland, Stanly, Transylvania, and Wilkes
counties all use this form of incentive.1
Of those counties that reported economic development
expenditures, six had no performance requirements,
five did not report any reason for the incentive, and
another six counties only awarded cash grants for
infrastructure investment. The remaining counties tied
their incentive to various performance measures. Of
those counties participating in performance agreements,
33 counties, or 44 percent of the total, did not disclose
performance results or outcomes, even though these
counties confirmed payment. This suggests that there
are gaps in the data and reporting deficiencies, but it
is not evident why economic development efforts lack
transparency.
Legal Authority
4
5
6
County governments are a creation of the state and must 3 Kara Millonzi, (2014). Introduction to Local Government
be granted statutory authority by the state to engage in
Finance. The School of Government at the University of
economic development. Actions required for a county
North Carolina at Chapel Hill.
1
Policy Report
Economic Incentives: County by county
Findings
Millonzi, p. 294
Ibid. p 295.
Maready v. City of Winston-Salem, 342 N.C. 708 (1996)
Haugh v. County of Durham, 208 N.C. App. 304 (2010)
Policy Report
Economic Incentives: County by county
Outliers
Recommendations
Policy Report
Economic Incentives: County by county
Cumberland 50% of ad valorem tax value of Rowan 70% - 75% reimbursement for a period
of 5 years.
invested property.
Duplin 80% grant of tax bill paid in one agreement; Scotland Four specialized agreements: one a
refund of 90% of the ad valorem tax base outright;
cash grants, state matching, and reimbursement for
two with sliding scales of refund percentages (one
construction of natural gas pipeline.
beginning at 80% and decreasing to 50% of ad
Durham A maximum value approved in
valorem tax rate multiplied by the depreciated value
agreements but actual paid value of the incentive
of equipment, one beginning at 50% and decreasing
calculated using total taxes (property, person, and
to 35% of ad valorem tax rate multiplied by the
other), specifics of each agreement not included in
property tax value of equipment investment.); one a
the data received.
cash incentive of $57,000 per year for three years.
Franklin Actual payment of 3% of the tax Stanly Refund of 50% - 90% of county taxes on
valuation of the investment in equipment, machinery,
investment value over 5 years.
property, and buildings for all agreements, with
separate stipulations for investment and job creation Transylvania Refund of 50% of property taxes
paid to the county.
for each individual agreement.
Gates Only one agreement, a refund for half of the Wilkes Most purely performance based with two
exceptions: one a 70% refund of real property taxes
property taxes paid on an historic school property
paid in addition to an outright cash grant, and the
sold by the county.
other reimbursed payments for rent from the county.
Harnett 50% - 80% refund of total taxes paid by
year.
Johnston All agreements refunding 50% - 100%
of ad valorem tax value with a decreasing percentage
over the life of the incentive, performance
stipulations with minimum investment and job
values by individual agreement.
Policy Report
Economic Incentives: County by county
47,854
27,423
25,822
11,069
37,528
152,531
55
72
74
94
65
18
Population Rank
$34,379
$30,290
$26,409
$33,011
$32,402
$32,929
Per
Capita
Income
Population
37
77
99
47
57
48
31
Total
Number
Rank
of
Contracts
Policy Report
Economic Incentives: County by county
Beaufort
Ashe
Anson
Alleghany
Alexander
Alamance
County
$1,770,790
$100,000
$106,207
$35,832
$499,468
$1,980,250
Approved
31
64
63
70
49
28
Rank
Agreements
$37.00
$3.35
$4.11
$3.24
$13.31
$12.98
Per
Capita
23
58
57
60
40
42
Rank
$1,526,790
$-
$106,207
$35,832
$468,799
$24,900
Paid
31
78
61
69
51
70
Rank
Paid
$31.91
$-
$4.11
$3.24
$12.49
$0.16
Per
Capita
13
78
59
60
41
75
Rank
Performance
incentive, state
match, and
discounted sale of
property
Performance
incentive
Performance
incentive
Non-performance
Performance
incentive
Performance
incentive
Type
Incentive
181,253
90,722
243,855
110,140
35,148
12
31
25
67
Population Rank
$38,079
$31,694
$36,341
$34,739
$31,127
Per
Capita
Income
Population
20
62
26
34
67
22
17
23
Total
Number
Rank
of
Contracts
Policy Report
Economic Incentives: County by county
Cabarrus
Burke
Buncombe
Brunswick
Bladen
County
$4,919,086
$919,791
$29,728,143
$2,985,000
Percentage
of tax
liability, not
a fixed value
Approved
16
40
20
77
Rank
Agreements
$27.14
$10.14
$121.91
$27.10
$-
Per
Capita
29
46
30
77
Rank
$4,919,086
$919,791
$5,158,903
$36,577
$878,236
Paid
40
68
41
Rank
Paid
$27.14
$10.14
$21.16
$0.33
$24.99
Per
Capita
18
49
25
72
21
Rank
No requirements
given
Performance
incentive
Performance
incentive
Infrastructure
contribution
Tax based
performance
incentive
Type
Incentive
10
10,460
27,300
64,553
154,992
9,921
83,117
95
73
40
17
97
33
Population Rank
$29,221
$27,459
$50,697
$34,716
$42,078
$28,121
Per
Capita
Income
Population
87
96
35
93
15
47
Total
Number
Rank
of
Contracts
Policy Report
Economic Incentives: County by county
Clay
Cherokee
Chatham
Catawba
Camden
Caldwell
County
$185,000
$11,044
Nonmonetary,
subsidized
use of public
facilities
$6,356,589
$19,700
$5,172,000
Approved
57
75
77
13
72
15
Rank
Agreements
$17.69
$0.40
$-
$41.01
$1.99
$62.23
Per
Capita
37
73
77
22
66
11
Rank
$185,000
$11,044
$1,129,309
$8,507,650
$19,700
$1,530,750
Paid
57
75
36
72
30
Rank
Paid
$17.69
$0.40
$17.49
$54.89
$1.99
$18.42
Per
Capita
30
71
33
65
28
Rank
Performance
incentive
Matching
infrastructure
contribution
11
Facility construction
and performance
incentive
Tax based
performance
incentive and land
sale
Job based
performance
incentive
Performance
incentive, given
amount per job
created
Type
Incentive
23,643
327,643
104,965
57,657
98,209
78
27
49
28
Population Rank
$42,239
$45,590
$39,078
$29,551
$32,852
Per
Capita
Income
Population
16
86
50
13
28
Total
Number
Rank
of
Contracts
Policy Report
Economic Incentives: County by county
Currituck
Cumberland
Craven
Columbus
Cleveland
County
$182,672
$498,941
$30,850
$1,855,753
$4,167,160
Approved
58
50
71
29
17
Rank
Agreements
$7.73
$1.52
$0.29
$32.19
$42.43
Per
Capita
49
68
74
25
21
Rank
$182,672
$4,144,473
$23,138
$1,012,658
$2,467,403
Paid
58
13
71
39
21
Rank
Paid
$7.73
$12.65
$0.22
$17.56
$25.12
Per
Capita
52
39
73
32
20
Rank
Infrastructure
contribution for
sewer connections
and firehydrants
12
Tax based
performance
incentive and state
match
Performance
incentive and
discounted property
sale
Performance
incentive
Tax based
performance
incentive and state
match
Type
Incentive
272,314
59,476
41,560
163,364
34,216
46
60
15
69
Population Rank
$40,963
$30,804
$38,552
$35,513
$41,208
Per
Capita
Income
Population
11
72
18
29
10
13
35
Total
Number
Rank
of
Contracts
Policy Report
Economic Incentives: County by county
Durham
Duplin
Davie
Davidson
Dare
County
$13,803,095
$1,733,142
$7,228,155
$3,970,194
$2,089,152
Approved
32
11
18
27
Rank
Agreements
$50.69
$29.14
$173.92
$24.30
$61.06
Per
Capita
15
27
32
13
Rank
$9,181,812
$1,733,142
$499,525
3,027,694
$1,536,857
Paid
26
49
17
29
Rank
Paid
$33.72
$29.14
$12.02
$18.53
$44.92
Per
Capita
11
16
45
27
Rank
Tax based
performance
incentive
Tax based
performance
incentive,
infrastructure
contribution, and
state match
Performance
incentive,
infrastructure
contribution, and
state match
13
Performance
incentive, discounted
land purchase, and
state match
Performance
incentive
Type
Incentive
11,944
207,506
61,651
354,878
56,089
93
42
50
Population Rank
$30,387
$34,812
$31,063
$39,583
$28,697
Per
Capita
Income
Population
75
33
68
15
90
14
12
Total
Number
Rank
of
Contracts
Policy Report
Economic Incentives: County by county
Gates
Gaston
Franklin
Forsyth
Edgecombe
County
Percentage
of tax
liability, not
a fixed value
$450,000
$1,684,586
$27,859,345
$1,172,137
Approved
77
52
33
37
Rank
Agreements
$-
$2.17
$27.32
$78.50
$20.90
Per
Capita
77
64
28
33
Rank
$-
$3,645,482
$699,621
$4,355,937
$1,800
Paid
78
14
45
11
77
Rank
Paid
$-
$17.57
$11.35
$12.27
$0.03
Per
Capita
78
31
46
42
77
Rank
Performance
incentive
14
Tax based
performance
incentive and state
match
Performance
incentive
Performance
incentive
Type
Incentive
59,684
118,615
54,397
495,231
60,863
45
24
51
44
Population Rank
$34,080
$30,059
$31,433
$39,037
$30,722
Per
Capita
Income
Population
38
78
63
17
73
20
10
Total
Number
Rank
of
Contracts
Policy Report
Economic Incentives: County by county
Haywood
Harnett
Halifax
Guilford
Granville
County
$376,166
$100,000
$8,209,414
$7,952,415
$2,769,163
Approved
53
64
23
Rank
Agreements
$6.30
$0.84
$150.92
$16.06
$45.50
Per
Capita
52
71
38
18
Rank
$-
$348,930
$1,683,543
$2,654,599
$1,171,277
Paid
78
54
27
19
35
Rank
Paid
$-
$2.94
$30.95
$5.36
$19.24
Per
Capita
78
61
15
56
26
Rank
Performance
incentive
Tax based
performance
incentive
Performance
incentive
No requirements
given
15
Matching to state
grants, infrastructure
contribution, and
one performance
incentive
Type
Incentive
161,522
5,815
49,065
24,466
108,448
16
99
54
75
26
Population Rank
$35,994
$33,302
$33,268
$28,728
$37,856
Per
Capita
Income
Population
27
43
44
89
22
51
20
Total
Number
Rank
of
Contracts
Policy Report
Economic Incentives: County by county
Iredell
Hyde
Hoke
Hertford
Henderson
County
$35,962,245
$11,902
$108,750
$749,255
$6,665,741
Approved
73
62
44
12
Rank
Agreements
$225.65
$2.05
$2.22
$30.62
$61.46
Per
Capita
65
63
26
12
Rank
$7,657,306
$11,902
$108,750
$360,255
$2,659,472
Paid
73
60
53
18
Rank
Paid
$47.41
$2.05
$2.22
$14.72
$24.52
Per
Capita
64
63
36
22
Rank
16
Performance
incentive and state
match
Performance
incentive
Performance
incentive
Performance
incentive
Performance
incentive, not all
requirements given
Type
Incentive
79,026
59,314
58,304
10,327
172,570
35
47
48
96
13
Population Rank
$36,580
$34,630
$33,332
$37,924
$35,210
Per
Capita
Income
Population
25
36
41
21
31
18
15
12
Total
Number
Rank
of
Contracts
Policy Report
Economic Incentives: County by county
Lincoln
Lenoir
Lee
Jones
Johnston
County
$551,894
$7,945,500
$2,868,390
$-
Percentage
of tax
liability, not
a fixed value
Approved
46
10
22
77
77
Rank
Agreements
$6.98
$133.96
$49.20
$-
$-
Per
Capita
51
17
77
77
Rank
$4,525,052
$2,174,690
$3,460,149
$-
$2,114,275
Paid
10
23
15
78
24
Rank
Paid
$57.26
$36.66
$59.35
$-
$12.25
Per
Capita
10
78
43
Rank
Performance
incentives that use
investment tier to
determine value of
payment
Performance
incentive
No requirements
given
17
Tax based
performance
incentive
Type
Incentive
89,395
940,697
45,462
24,083
34,459
32
59
76
68
Population Rank
$40,636
$47,426
$27,808
$32,414
$32,028
Per
Capita
Income
Population
13
95
56
59
29
Total
Number
Rank
of
Contracts
Policy Report
Economic Incentives: County by county
Moore
Mecklenburg
McDowell
Martin
Macon
County
$1,821,048
$25,296,832
$827,000
$1,500,000
$40,500
Approved
30
42
35
68
Rank
Agreements
$20.37
$26.89
$18.19
$62.28
$1.18
Per
Capita
34
31
36
10
69
Rank
$1,083,024
$4,228,843
$590,885
$412,050
$39,541
Paid
37
12
47
52
67
Rank
Paid
$12.12
$4.50
$13.00
$17.11
$1.15
Per
Capita
44
58
38
34
66
Rank
Infrastructure
contribution and
performance
incentive
No requirements
given
Performance
incentive
Performance
incentive
Performance
incentive
Type
Incentive
18
13,537
53,437
135,776
21,844
206,774
96,122
90
52
21
79
29
Population Rank
$33,019
$32,480
$51,702
$32,555
$37,559
$35,459
Per
Capita
Income
Population
46
54
53
23
30
Total
Number
Rank
of
Contracts
Policy Report
Economic Incentives: County by county
Perquimans
Pender
Orange
Northampton
New Hanover
Nash
County
$100,000
$2,654,398
$1,443,950
$969,297
$8,800,000
$330,000
Approved
64
24
36
39
55
Rank
Agreements
$7.39
$49.67
$10.63
$44.37
$42.56
$3.43
Per
Capita
50
16
44
19
20
59
Rank
$104,500
$1,666,500
$80,000
$1,023,878
$5,816,750
$52,057
Paid
62
28
63
38
65
Rank
Paid
$7.72
$31.19
$0.59
$46.87
$28.13
$0.54
Per
Capita
53
14
68
17
70
Rank
Discounted sale of
land
Land donation,
fee waiver, and
performance grant
Performance
incentive and state
match
Sale of property
combined with
performance
incentive
Performance
incentive
Performance
incentive
Type
Incentive
19
46,459
142,901
20,453
170,263
39,700
57
19
84
14
63
Population Rank
$28,820
$31,062
$40,232
$35,743
$31,237
Per
Capita
Income
Population
88
69
14
28
66
16
10
Total
Number
Rank
of
Contracts
Policy Report
Economic Incentives: County by county
Richmond
Randolph
Polk
Pitt
Person
County
$230,000
$863,535
$120,700
$462,840
$2,525,000
Approved
56
41
61
51
26
Rank
Agreements
$4.95
$6.04
$5.90
$2.72
$63.60
Per
Capita
55
53
54
61
Rank
$1,218,195
$2,398,535
$120,700
$1,420,692
$2,525,000
Paid
33
22
59
32
20
Rank
Paid
$26.22
$16.78
$5.90
$8.34
$63.60
Per
Capita
19
35
55
51
Rank
Tax based
performance
incentive
Performance
incentive and
infrastructure
contribution
Match of state
employment
incentive
20
Tax based
performance
incentive and state
match
Performance
incentive
Type
Incentive
63,746
68,392
138,309
93,558
134,651
41
38
20
30
22
Population Rank
$32,818
$28,123
$31,365
$32,307
$26,399
Per
Capita
Income
Population
51
92
64
58
100
21
21
25
Total
Number
Rank
of
Contracts
Policy Report
Economic Incentives: County by county
Sampson
Rutherford
Rowan
Rockingham
Robeson
County
$3,513,234
$757,924
$37,500
$6,095,595
$1,123,262
Approved
19
43
69
14
38
Rank
Agreements
$55.11
$11.08
$0.27
$65.15
$8.34
Per
Capita
14
43
75
47
Rank
$54,185
$773,477
$3,129,038
$1,183,108
$6,654,910
Paid
64
44
16
34
Rank
Paid
$0.85
$11.31
$22.62
$12.65
$49.42
Per
Capita
67
47
24
40
Rank
Performance
incentive
21
Tax based
performance
incentive
Performance
incentive
Non-performance
Type
Incentive
33,275
73,575
47,551
60,936
36,029
70
36
56
43
66
Population Rank
$32,689
$31,970
$33,064
$32,463
$29,592
Per
Capita
Income
Population
52
60
45
55
83
16
Total
Number
Rank
of
Contracts
Policy Report
Economic Incentives: County by county
Transylvania
Surry
Stokes
Stanly
Scotland
County
$345,886
$2,531,800
$4,800
$57,975
$171,000
Approved
54
25
76
67
59
Rank
Agreements
$10.39
$34.41
$0.10
$0.95
$4.75
Per
Capita
45
24
76
70
56
Rank
$345,886
$488,123
$4,800
$2,035,689
$824,890
Paid
55
50
76
25
43
Rank
Paid
$10.39
$6.63
$0.10
$33.41
$22.90
Per
Capita
48
54
76
12
23
Rank
22
Tax based, no
requirements given
Performance
incentive,
infrastructure
contribution,
discounted lease of
buildings, and state
match
Tax based
performance
incentive
Tax based
performance
incentive
Type
Incentive
123,710
20,883
925,938
45,558
205,717
23
83
58
10
Population Rank
$33,620
$26,882
$44,839
$31,058
$38,130
Per
Capita
Income
Population
39
98
70
19
10
14
Total
Number
Rank
of
Contracts
Policy Report
Economic Incentives: County by county
Wayne
Warren
Wake
Vance
Union
County
$1,661,525
$11,575
$18,499,844
$2,869,145
$548,173
Approved
34
74
21
47
Rank
Agreements
$13.43
$0.55
$19.98
$62.98
$2.66
Per
Capita
39
72
35
62
Rank
$652,400
$11,575
$7,931,128
$836,287
$44,570
Paid
46
74
42
66
Rank
Paid
$5.27
$0.55
$8.57
$18.36
$0.22
Per
Capita
57
69
50
29
74
Rank
23
Waived construction
fees
Performance
incentive,
infrastructure
contribution, and
state match
Performance
incentive
Performance
incentive
Type
Incentive
38,442
81,380
69,592
64
34
37
Population Rank
$32,859
$35,197
$33,313
Per
Capita
Income
Population
49
32
42
11
Total
Number
Rank
of
Contracts
Policy Report
Economic Incentives: County by county
Yadkin
Wilson
Wilkes
County
$500,000
$150,000
$564,959
Approved
48
60
45
Rank
Agreements
$13.01
$1.84
$8.12
Per
Capita
41
67
48
Rank
$500,000
$8,573,178
$192,283
Paid
48
56
Rank
Paid
$13.01
$105.35
$2.76
Per
Capita
37
62
Rank
24
Infrastructure
contribution to city
Performance
incentive
Type
Incentive