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May 26, 2024

North Carolina-Apple agreement ‘worst economic deal’ of the year

North Carolina’s multi-million dollar tax incentive for Apple to build a campus and engineering hub in the state is the “Worst Economic Development Deal of the Year” for 2021, according to report from the Center for Economic Accountability.

State leaders announced the deal with Apple in April to build a 1,000,000-square feet facility in the Research Triangle Park that they said would create at least 3,000 jobs and bring $1.5 billion a year in economic benefits to the state. However, analysts at CEA said the economic benefits are inflated, and Apple would have selected North Carolina for its new campus without the corporate handout.

“A billion dollars is a lot of money for North Carolina’s taxpayers and communities, because that’s a billion dollars’ worth of public services not being funded,” CEA President John Mozena said. “But for a company like Apple, which reported more than a billion dollars a day in revenues this past year, it isn’t anywhere near enough money to move the needle on a major site selection decision.”

Apple selected North Carolina for its new campus after three years of deliberations. The company’s final choice was between Ohio and North Carolina. North Carolina agreed to compensate Apple $846 million over the next 39 years. Officials in Wake County, where the campus will be built, offered a 50% property tax abatement over the next 30 years.

Apple also agreed to establish a $100 million fund to support school and community initiatives in North Carolina and contribute more than $110 million for broadband and infrastructure projects in rural areas. As of Monday, Apple became the first publicly traded company to be worth $3 trillion.

CEA contends that because of North Carolina’s high-ranking business climate and the Research Triangle Park’s reputation as a technology hub, Ohio did not stand a chance against the Tar Heel State.

The Raleigh metro area ranked seventh in the nation for the density of its tech workforce by the Computing Technology Industry Association in 2021, while no metro area in Ohio ranked higher than 36th. Gov. Roy Cooper said Apple was the 11th company that has announced new jobs in North Carolina over the past two months. The state was ranked No. 1 for its business climate by Site Selection magazine in 2021 for the second consecutive year.

“Few – if any—independent rankings put any Ohio metro area on similar footing with the Research Triangle when it comes to key tech industry site selection factors,” CEA said. “For independent observers, this looks less like an actual competition and more like something bureaucrats had to say to nominally comply with state laws designed to limit wasteful corporate welfare.”

CEA also said the economic predictions were “ridiculous.” CEA estimates that for Apple to reach its goal of $1.5 billion in economic benefits to North Carolina a year, each of the 3,000 employees in Apple’s Research Triangle facility would have to generate $500,000 in GDP per capita, nine times more productive than the current workforce. It also surpasses the GDP of Silicon Valley, which generated $128,000 in 2017.

This article was originally posted on North Carolina-Apple agreement ‘worst economic deal’ of the year

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