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The Future of California Is Moving To North Carolina

Wednesday, May 27, 2009  |  posted by Hugh Hewitt
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This story should be placed on every legislator’s desk in Sacramento, and a stack of copies carried around Arnold’s office. Key graphs:

North Carolina lawmakers are pushing to give Apple Inc. a multi-million dollar tax break should the company bring an East Coast computer server farm to the state -an estimated $1 billion investment, according to a state official with knowledge of the recruitment efforts.

State and local governments offered Google an incentive package worth up to $260 million over 30 years, one of the largest incentives packages in state history, to land the data complex. If the Apple project also remained active for 30 years, its server farm could save more than $300 million on its corporate taxes, based on legislative staffers’ estimates that the tax break would mean a savings of $3 million from 2011 to 2018, and then $12.5 million each year after that.

Google, Microsoft and other technology giants have responded to booming Internet use by building server farms: huge, climate-controlled computer warehouses that can store enormous amounts of information and process vast flows of data. They are heavy users of power and water and are usually spread over large spaces.

Though the Apple site is initially expected to employ fewer than 100 full-time workers, legislators said the potential prize was so juicy it justified changing the state’s corporate tax formula to benefit a single company. North Carolina’s unemployment rate remained at 10.8 percent in April, marking a third-straight month it was in the double-digits, the state Employment Security Commission reported Friday. Four non-urban counties have unemployment rates of more than 16 percent.

I have long wondered why northeastern Ohio with its well-developed industrial infrastructure and low-cost-but-high-quality standard of living with regards to housing, education and recreation (except having to watch Cleveland sports, oh Cavs) hasn’t adopted North Carolina’s strategy, but the Tar Heel State clearly gets it. California is bleeding out, and unless the sky-high tax rates come down quickly, the loss of economic vitality will accelerate.

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