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It's unclear how much money Dell will pay have to back in state and local tax incentives after reneging on an agreement to keep a Forsyth County plant open, but Gov. Bev Perdue says she wants "every red cent."
Dell Inc. announced Wednesday it will close its North Carolina plant, putting more than 900 people out of work. The plant opened in 2005.
The company was set to get $281 million dollars in tax breaks from state and local governments as incentives. In exchange, the Texas-based company was required to invest $100 million, create 1,700 jobs by September 2010 and maintain those jobs for 10 more years. If those terms weren't met, the company would forfeit the incentive package.
Dell officials said they will pay back what is owed.
Perdue said in her conversations with Dell officials, they understood the deal.
“We talked very directly about the incentive package and first of all for the taxpayers of North Carolina, we made it clear to them and they already understood it quite frankly, that every red cent of incentive money had to come back to the people of North Carolina.”
An e-mail from the State Commerce Department gave several figures. It is unclear which ones had to be repaid:
- According to the Commerce Department, the state's special computer manufacturing tax credit, projected to result in $200 million for Dell, yielded only $106,000.
- That and other incentives, including the Job Development Investment Grant, Lee tax credits and workforce training, bring the total to about $8.5 million.
- Of that, $1.5 million is from payments for 2006 and 2007 from the state's JDIG program, for creating 1,300 jobs and investing $119 million.
- About $3.6 million in work force training funds, from the N.C. Community College System and Commerce's Workforce Division, has gone toward strengthening worker skills and abilities - an investment that will continue to benefit individuals and employers.
The Commerce Department spokeswoman said Dell has committed to pay back the state what is owed under the JDIG grant agreement, but did not further explain the other figures.
"Our main concerns now are to work with the company to assist displaced workers and to determine the next steps in recovering grant funds. We will also continue to review all information related to the incentives," she said.
Perdue said Dell told her the desk top computer market was “dead” and the company was having trouble competing.
"This may happen again, there may be another company that has outlived its capacity to compete in the 21st century in North Carolina,” Perdue said.
When asked if the state's incentive policy should be changed, she said her priority is jobs. She said incentives have worked for companies such as Durham-based CREE, which announced plans Thursday to hire 275 employees in 2009.
"Any company that comes to me that's credible with an opportunity to grow jobs here in this state and wants to have a conversation about incentives, I'll have it."

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By Bobby on 10/09 08:49 AM
Instead of taxing companies that have factories outside of the US, how about LOWERING the taxes on everybody and everything. If you lowered taxes in the US, then more small businesses and large companies would invest and build HERE. If you polled all of these companies that have facilities overseas, I bet that the vast majority would say that they would rather be located in the US.
By Jack on 10/08 09:32 PM
Dell could not compete by making there computers in the state. I would say with in the next 18 months they will have a factor in China making there computers. If government wants companies to manufacture in the US they need to come up with a way to tax companies that manufacture over a certain percentage overseas, in 30 years there will be hardly nothing manufacture in the states.
By FrankO on 10/07 04:21 PM
Amen Bobby, all these regulations are not protecting anyone. All they accomplish is to make it more difficult to start or run a small business. All the politicians claim to understand that small businesses are vital to the economy & yet they give all these incentives to big businesses while they bury small businesses in red tape, taxes, fees, regulations & bureaucracy!!!
By Bobby on 10/07 03:59 PM
Government needs to get OUT of the business of giving "incentives" to certain businesses. I am a small businessman and when I try to open a business, all I get are ROADBLOCKS by local and state governments! $300M for 1700 jobs?!?!?!? Government is out of control. They tax and take your money to hire bureaucrats to tell us what we can and cannot do.
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