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Judge hears arguments in case over agreement that helped lure Dell plant
By David Rice JOURNAL RALEIGH BUREAU

As North Carolina pursues another big employer - a Toyota plant - attorneys spent the day yesterday arguing over more than $270 million in incentives that state and local officials approved for the last one - Dell Inc.’s plant in Winston-Salem.

With a handful of taxpayers as their clients, attorneys from the center sued the state, the city, Forsyth County and Dell last June over the tax breaks and other incentives that Dell received - at least $242 million from the state and more than $30 million from the city and county.

They contend that the incentives violate the N.C. constitution, which requires that tax dollars be spent for public purposes; that the deal violated the equal-protection clauses of the state and federal constitutions, by giving Dell breaks that other companies don’t get; and that the agreement violated the commerce clause of the U.S. Constitution, by giving an advantage to an in-state company that out-of-state companies don’t get.

Attorneys for the state and Dell have asked Hobgood to dismiss the case.

Burley Mitchell, a former chief justice of the N.C. Supreme Court who represents Dell, said that most of the issues were decided in 1996, when the court ruled on a lawsuit brought by William Maready, a lawyer from Winston-Salem, over grants to businesses from the city and county.

"The issues raised in this case just don’t have any business before the court," Mitchell said.

"Maready resolves almost all of this," he said. "Maready said that economic-development incentives do serve a public purpose."

Devoting public dollars to lure new business improves the economy, increases the tax base, provides jobs and lets North Carolina compete, Mitchell said.

To strike down the state’s incentives, he told Hobgood, "would send a message nationally and even more important, internationally these days, that North Carolina is no longer friendly to business."

Mitchell said later that the case could also have a chilling effect on efforts to lure a Toyota plant to the Triad.

"I guarantee you’re not going to get Toyota without some incentives," he said. "This may very well end our participation in these competitions for major industries." (more…)

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This entry was posted on Friday, April 28th, 2006 at 4:06 am and is filed under Daily News. You can follow any responses to this entry through the RSS 2.0 feed.