Governor Cooper’s announcement early this week that he and the legislature have signed a deal costing the state $18 million to bring a portion of the U.S. Golf Association (USGA) operations to Pinehurst is another example of the disconnect elected officials have with the economic conditions brought on by the coronavirus pandemic and subsequent government mandated business restrictions.
This announcement smacks of cronyism and is definitely the wrong message at the worst moment.
Wednesday the governor announced that the state is underwriting the construction of a golf museum, a visitor’s center and a golf research base in Pinehurst and as a result the USGA will re-locate a portion of its headquarters currently in Liberty Corner, N.J., to the Moore county village. The USGA is the governing body for professional golf in the U.S. and Mexico, conducting 14 national championship golf tournaments including the U.S. Open, Women’s Open and Senior Open, as well as testing golf equipment for conformity.
In return the USGA will invest $36 million in Pinehurst and will hire 50 people, with 35 being new hires at an average salary of $80,000. That investment will start in 2022.
There’s nothing wrong with the state trying to enhance and diversify the state’s economy but it is both a bad visual and a tone deaf signal when it comes at taxpayer expense in an environment of economic distress brought on by government mandate business closure, primarily impacting the hospitality industry.
It is ironic that, as the governor was making the announcement, tavern and bar owners were preparing to rally at the governor’s mansion in Raleigh to decry their forced closure while bowling alleys, gyms and restaurants are allowed to open, albeit with very reduced customer numbers.
A recent article by Kari Travis of the Carolina Journal decried the announcement as an example of cronyism noting that once again the governor, with the aid of the General Assembly, picked winners and losers in the state’s economy by doling out taxpayer supported funds. In this case the winners are the Pinehurst Resort and USGA and the losers are the taxpayers.
Establishing incentives to attract business investment is nothing new either in North Carolina’s political or economic history. Business incentive packages are a game played among all the states as their economic development arms provide justification for their existence. So cronyism is to be expected- it’s who you know and what shiny new thing is being offered that gets the attention as the USGA proposal did.
But this announcement is particularly galling since it comes at a time when many businesses in the hospitality industry are experiencing financial disaster as a result of the very politicians, who are taking credit for economic growth, have diminished those prospects for others. Approximately 170,000 hospitality workers remain unemployed as the governor’s mandates restrict the numbers of customers served in restaurants and keeps bars and taverns closed under the guise to reducing the coronavirus contagion. It should be noted the governor’s original intentions were to “bend the curve” of people infected which succeeded months ago, and yet his restrictions remain in place.
The result of these mandates is the almost daily announcement of hospitality businesses that had intended to be closed temporarily are now closing permanently. This week’s announcement that the K&W Cafeteria chain is closing permanently puts formerly temporarily unemployed staffers now permanently unemployed.
Ms. Travis’ Carolina Journal article delineates numbers that should concern taxpayers and should be a concern to all elected officials. Billed as the Championship NC Act, the governor with the legislature’s approval is underwriting the $18 million giveaway with $3.5 million from the One North Carolina Fund, a discretionary cash grant that the governor can use for “job-creation projects” and $100,000 from the Job Development Investment Grant. This leaves $14.5 million yet to be funded, And there are yet undefined tax breaks coming from the state.
It is worth noting that many of these funds are designed to finance investments in low income regions of the state identified as Tier 1 or 2 counties. Moore County and particularly Pinehurst with a median income of $80,128 qualifies as one of few Tier 3 or high-income communities in North Carolina.
Borrowing a golf term for bad shot, Governor Cooper has played a shank shot. While fighting to keep thousands of businesses closed resulting in tens of thousands being unemployed, he proudly announces giving funds for a project in one of the wealthiest communities in the state to a company that last year reported revenues of $211 million. It’s too late to make a course change but not too late to make a player change.