by: Jim Bradley Updated:
CHARLOTTE, N.C. - Charlotte has had its share of corporate relocation victories lately -- MetLife and Sealed Air Corp. to name a few.
But when it came to landing Toyota's North American headquarters earlier this year, the Queen City found Texas had a king-sized advantage, economist John Connaughton said.
“There's a lesson for every state in this,” Connaughton said. “Taxes matter.”
While North Carolina was putting together an incentive package worth a reported $107 million, Toyota chose Texas' offer of $40 million in part because it has virtually no corporate or personal income taxes.
State legislators have already cut North Carolina income tax rates this year from 7.8 to 5.8 percent.
But Sen. Bob Rucho, R-Mecklenburg, said the Texas deal proves further tax reform in North Carolina is needed.
“The leg up that they have over us is the fact that they do have a personal income tax rate of zero,” Rucho said. “And that's going to be our goal to be competitive.”
That could take years to accomplish.
That's why Charlotte's Chamber of Commerce is supporting the state Commerce Department's push to get legislators to add money to economic incentive programs that could run out of cash in October.
“There are tools that we won't be able to put on the table to close deals,” Bob Morgan, of the Charlotte Chamber, said. “Those deals might very well end up going to other states.”
There's a push underway right now to get the governor to ask for a special session of the legislature to address job development incentives.
Gov. Pat McCrory's office didn't respond Friday to Channel 9 questions about that, but the loss of Toyota's headquarters to Texas underscores how high the stakes are for Charlotte.