State won't collect all of Dell incentive money
1:00 pm
Wed October 14, 2009

State won't collect all of Dell incentive money

When computer maker Dell announced last week it will close its Winston-Salem plant and lay off more than 900 workers, Governor Bev Perdue said she hoped to get back every "red cent" the state had given the company in economic incentives.

That package could have totaled more than $300 million from state and local government. So far, Dell has collected on about $30 million of that, and the state now appears unlikely to get it all back.

WFAE's Julie Rose reports:

State officials expect to be reimbursed for only about $1.5 million of the $8.5 million the state had paid Dell, so far. That was money the company received during 2007 and 2008 for creating jobs and investing in the Forsyth County plant. Commerce Department spokeswoman Kathy Neal says the incentives are meant to lure long-term job growth:

"Unfortunately in this case that turned out not to be the case," says Neal. "But the program is performance based - that means companies have to meet jobs and investment criteria before they receive any money. And if circumstances change, the program also allows us to retrieve some of that money."

Neal says Dell has committed to pay back that $1.5 million. But there is at least $3.5 million in other incentives the state appears unlikely to collect. Much of that money was spent training Dell workers in partnership with Forsyth Community College. Those workers are now out of a job, but Governor Perdue's spokeswoman Chrissy Pearson says the money wasn't a total waste.

"Hopefully, the skills those workers received from that training will then be transferable to another business, another industry here in North Carolina to help those workers get back on their feet," says Pearson.

In comparison to the state, the city of Winston-Salem is on the hook for quite a bit more: it offered about $15 million to land the computer manufacturer. The mayor says he expects to get all of it back.

As for the Governor's pledge to get back "every red cent" of the state's money, Pearson says Perdue now recognizes there is some money the state won't recover. But she's not ready to stop offering incentives, either:

"One thing Governor Perdue is committed to doing is bringing as many new jobs and as much business to North Carolina, to the state as she possibly can," says Pearson. "And as long as other states are using incentives, she has acknowledged that North Carolina will continue to have to do that as well."

Earlier this year, the North Carolina approved a $46 million incentive deal to bring Apple Computer to Catawba County.

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