August 31st / September 1st, 2013

"North Carolina Gets into the Gun Business"

If you thought it was strange for our elected officials to allow guns in bars, then just try and wrap your brain around their latest idea. If all goes well at next month's public meetings, the state of North Carolina, the town of Mayodan, and Rockingham County will combine to offer the Sturm Ruger company upwards of $17 million dollars in various perks and tax incentives to locate a gun manufacturing plant in Mayodan. In my mind, mixing incentives with guns is like getting shot with both barrels.

First, let's address the problem of incentives. Over the past ten years I have asked a number of legislators and Governors if they support corporate welfare, and every one gives the same answer, almost word for word: "I wish we didn't have to offer incentives, but every other state does, so we have to do it in order to be competitive". Their sentiment represents a lazy strategy for marketing our state's many assets to would-be prospects. It is also a flawed strategy.

Take the Dell deal, for example. The computer giant told our state officials that we would have to beat Virginia's incentives package, or else they would locate to the Old Dominion. The Governor, General Assembly and local officials went into panic mode and rushed through an incentives package worth over $300 million dollars to lure the company to Forsyth County. But later we learned that Virginia (whose bid Dell had kept secret) had only offered a package worth about $30 million, so North Carolina paid ten times more than we needed to. Dell promised to create lots of new jobs, but the company later misjudged the market shift to laptops, so the plant was closed.

OK, so maybe Dell is an unfortunate and atypical example, but let's not forget that under any circumstance, incentives rarely create "new" jobs. In most cases the company merely shifts jobs from one state to another. Ruger, for instance, will move two production lines from New Hampshire to Mayodan, so our gain is the Granite State's loss.

Ruger has promised to hire 120 people within the first year, then add 90 new jobs each year thereafter, providing that the company is able to create one to two new product lines. In return, Ruger is poised to receive a lot of tax payer incentives, including $13 million dollars from the State, $942,000 from Rockingham, and $853,000 from the town of Mayodan. County commissioners will issue a final vote on September 3, and town councilmen will decide on September 9. At this point, there is no reason to believe that either entity will back out of the deal.

Proponents of incentives will tell you that localities seldom risk anything. In the case of Ruger, incentives from Rockingham and Mayodan will be generated from the new taxable value of Ruger's investment. But that's a straw man argument. If Ruger were to locate here without receiving a handout, then, over time, we would be using the taxes derived from Ruger to pay for schools, human services, and public safety, not for directly and indirectly recycling those revenues back to the company.

Now, to the moral dilemma of this matter. Ruger manufacturers all sorts of firearms, as well as accessories such as high volume magazines. So what? Guns are legal. And, as most conservatives will tell you, "Guns don't kill people. People kill people". That's true. But simple logic dictates that the more guns we make, the more gun-related injuries and deaths will result. According to the Center for American Progress, North Carolina ranks as the 15th worst state for gun violence.

In fact, according to the NC Violent Death Reporting System, approximately 1,100 hundred residents of our State are killed with a firearm each year. And the hits just keep coming. The FBI tells us that last year alone, there were over 415,000 applications for gun licenses here in North Carolina. And, given Governor McCrory's recent gun law, it's not likely that our State's ranking for gun violence will improve any time soon.

Lord knows we need every job we can get, but paying private industry to create them (ie, shift jobs from another state) is not a long term gain for us or our national economy, nor do we need to get into the gun manufacturing business. Yes, Ruger might hire a couple hundred people for an unspecified period of time, but does that justify our enabling them to flood the market with thousands of new guns? I don't think so. There is such a thing as the moral imperative, and bribing Ruger to make guns here will be like shooting ourselves in the foot. If that happens, what would our elected officials put in their mouths?