When North Carolinians line up at the polls today, they will choose between candidates seeking positions at every level of government, from state commissioner of agriculture to president of the United States. One of the most important decisions, however, will not involve any candidates.
Rather, it will be the decision to amend North Carolina’s Constitution to drastically change the way localities finance public improvements. The plan, known as “Amendment One,” would allow cities and counties across the state to pay for public works development using tax increment financing. While the amendment’s supporters claim it will create jobs and stabilize the state’s economy, opponents claim it will hurt small businesses and is inherently unfair.
TIF is a method of paying for public works based upon the notion that the improved region will generate greater amounts of tax revenue in the future. A portion of the improvement is paid for by the taxes the area currently generates, and the remainder comes from the area’s future tax revenue. North Carolina is one of only two states currently without TIF.
“It’s a tool that local governments will be able to use to improve public space [such as] sewers and roads,” said Kelly Calabria, a spokesperson for North Carolinians for Jobs and Progress, the amendment’s primary proponent. “Once these things are redeveloped jobs will come into the area.”
Opponents of the measure suggest it will favor larger businesses and thus hurt economic competition in North Carolina. Perry Morgan, a spokesperson for the North Carolina office of the National Federation of Independent Businesses, said large corporations will demand TIF-funded development in their areas and move elsewhere if denied.
“Our members believe that all businesses should be treated equally,” Morgan said. “If you subsidize some businesses, you are putting others at a competitive disadvantage.... These things have tremendous political significance.”
Morgan added that her group’s constituents, mainly small businesses, are likely to be ignored when it comes to TIF-funded efforts for public works improvement.
“Nobody’s going to build a manufacturing plant for a company with six employees,” she said. “Not gonna happen.”
The legislature passed a bill placing Amendment One on today’s ballots at the end of its 2003 session. Many of the states that currently use TIF to finance development did not need to amend their constitutions, but North Carolina is a special case.
“North Carolina has a very tightly drawn constitution as it pertains to power granted to local governments,” said Leslie Bevacqua Coman, who heads up the steering committee of NCJP.
Although Coman cites other states’ examples as reasons for adopting the amendment, Morgan shrugs them off.
“We don’t think just because other states are making bad public policy, we should too,” she said.
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