Is North Carolina headed for financial disaster?
HB 2 could cost North Carolina $3.76 billion over 12 years, reports AP
Despite insistences by General Assembly leaders and social conservatives who have defended North Carolina’s decision to pass HB 2, a new Associated Press analysis finds that the measure curbing LGBTQ rights is expected to cost the state more than $3.76 billion in lost business over the next 12 years.
The AP based its projections on information about cancelled business ventures, relocations, or expansions that would have benefitted the state economically, with numerical data obtained either from the businesses themselves or from state and local officials who had been working with companies to help them set up shop in the state.
But the news organization also notes that it is likely underestimating the law’s true economic costs. For instance, a recent cancelled television production venture by Lionsgate was not included because of a lack of hard numbers on the economic impact of that project.
Among those scuttled business ventures that are included in the cost to the state are a cancelled expansion by PayPal, which would have employed over 400 workers and added an estimated $2.66 billion to the state’s economy, and a Deutsche Bank project that was expected to bring in more than $543 million into the state by the end of 2027. Other failed ventures scuttled over HB 2 include the relocation of a CoStar facility that would have employed 732 workers to Richmond, Va., instead of Charlotte, which is estimated to have cost the state at least $250 million, and of a Voxpro facility that would have employed 500 workers to Athens, Ga., instead of Raleigh, costing the state at least $52 million.
The AP’s analysis also estimated that the state lost more than $196 million due to the cancellation of various sporting events, conventions, concerts, and other events. That estimate is based on more than a dozen interviews with tourism officials and event planners in cities including Asheville, Charlotte, Greensboro, Raleigh, Manteo, Wilmington, Durham, and Fayetteville. State officials have been warned that that number could increase if the NCAA decides to pass by North Carolina as a potential host for various sports championships through the year 2022 because of the organization’s opposition to HB 2.
Supporters of the law — which eliminates all local ordinances protecting LGBTQ people in employment, housing, and public accommodations, and restricts the restrooms and other facilities that transgender people can access — have argued that the impact of these losses is minimal, and point to statistics showing the state’s economy is still rapidly expanding and that the state is a good place to set up a business. Lt. Gov. Dan Forest even testified before a Texas Senate committee in favor of a bill that would impose HB 2-style restrictions on the Lone Star State. According to Forest, the effect of the scuttled business opportunities is “minimal to the state.”
But according to the AP, North Carolina’s economy would be growing even faster if it had not been for the projects that were cancelled due to HB 2. And since those projects have moved on to other states, the money lost can never be recouped, the AP notes.
The Human Rights Campaign, which has lead calls for the repeal of HB 2, pounced on the AP’s analysis as yet another piece in a mounting pile of evidence that North Carolina lawmakers are working against their constituents’ best interests.
“In light of the AP’s jaw-dropping new economic analysis, every North Carolina lawmaker should have to answer a simple question: Is discrimination worth nearly $4 billion dollars?” HRC President Chad Griffin said in a statement. “In addition to the personal suffering this bill has caused LGBTQ people over the last year, it has already inflicted incredible damage upon the state’s economy. It’s time for lawmakers to fully repeal HB2 once and for all, because the price of their inaction is simply too great.”
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