THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, January 31, 1995 TAG: 9501310011
SECTION: FRONT PAGE: A14 EDITION: FINAL
TYPE: Editorial
LENGTH: Medium: 55 lines
Gov. George Allen says the state's Business, Professional and Occupational License Tax has got to go because North Carolina hasn't got such a tax. Therefore, Carolina has got ``a competitive advantage over Virginia.''
It's possible that North Carolina has a competitive advantage over Virginia when it comes to recruiting business. But any cause-and-effect relationship linking that to the BPOL remains unproved and is probably unprovable.
As proof, Allen claims six businesses accounting for 1,700 jobs have been lost to North Carolina because of the BPOL, but he declines to name them. That's hardly proof. The lack of specifics suggests closer scrutiny of the claim is needed.
Businesses rarely choose to relocate for a single reason. North Carolina has aggressively sought to attract new businesses by selling a variety of strengths. It is a low-wage state, but it has invested heavily in education. Its state colleges and universities are widely admired and inexpensive to attend. The pioneering Research Triangle Park has been a magnet for high-tech firms.
North Carolina's community colleges will train workers to the specifications of an employer. It has long considered itself the ``good roads'' state and has sought to provide infrastructure attractive to businesses. On the debit side, North Carolina does not have the BPOL tax but it does levy an extremely annoying intangibles tax on all residents who earn money from investments.
It says more about Allen than about the competition between North Carolina and Virginia that he singles out only one tax he opposes as the crucial difference between the two states.
If he really wants to compete, maybe he should recommend a state initiative to emulate Research Triangle Park and a crash program to improve transportation beginning with roads leading to North Carolina which are now inadequate. He might propose lower tuition and more spending on education or - to make the slavish imitation complete - why not an intangibles tax, since the more competitive North Carolina has one?
In fact, aping our neighbors is not the way to make Virginia an attractive relocation site for businesses. Steadily working to make the state a better place to do business and capitalizing on its unique strengths are the course to follow.
Doing so may require adjustments to tax policy, but it will also mean paying attention to the need for competitive schools, a pool of trained workers, improved infrastructure and other essentials. Allen's single-minded devotion to tax relief threatens to blind him to the complex mix of factors that play a part in the economic success of this or any state. by CNB