State economic development spending in North Carolina is analyzed in a new report by a Washington-based think tank.

North Carolina recently released a so-called Economic Development Inventory (EDI), which identifies state spending on economic development. The report, by the Corporation for Enterprise Development (CFED), expands on the EDI's analysis, and suggests how investment incentives could be better spent.

Government spending on economic development in North Carolina has nearly doubled since 1996 (US$ 666 million to US$ 1.2 billion). The largest chunk of money is in the form of tax incentives (US$ 1.1 billion). The report warns that these tax incentives give certain firms an unfair advantage over others, particularly larger firms over smaller ones. An across-the-board cut in business tax rates would be better, says CFED.

The report praises the EDI as an important first step toward providing the necessary data for analyzing and evaluating state spending on investment incentives.

"Given the growing scope and importance of economic development, surprisingly few states have systematic budgeting and review procedures in place to measure what they are getting in return for economic development spending, or even have an accurate guess at the total fiscal out-go. This means they are flying in the dark without neeed lights or radar".

The full report, "At What Cost? North Carolina's Budget For Economic Development" is available on-line by clicking here.