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Morning Memo: McCrory administration slanted Medicaid report

McCRORY BOOED IN HIS HOMETOWN: For his 69th birthday party, Charlotte attorney Bill Diehl rented out The Fillmore at the N.C. Music Factory, hired rockers Grace Potter and the Nocturnals and invited around 400 of his closest friends, Jim Morrill reports. Among them: Gov. Pat McCrory.

When the band took a break, Diehl grabbed a mic and introduced McCrory, who was greeted with a loud smattering of boos. It wasn't the first time the former Charlotte mayor -- elected and re-elected seven times -- has heard boo birds in his hometown. In Charlotte, at least, the popular mayor has been a less popular governor. This summer he appeared at a concert at the Bechtler Museum. When he was formally introduced, many in the audience booed.

MUST-READ: For months, members of the McCrory administration have maintained that the state’s Medicaid program is "broken." But in the first of a two-part investigation, North Carolina Health News shows McCrory officials sat on information that would have depicted the state’s much-lauded Medicaid program in a better light. Read it here.

***More from the N.C. Health News story and an important notice to readers below in the Dome Morning Memo.***

North Carolina spent $1.3 billion last year on economic development

North Carolina spent more than $1.3 billion on economic development last year, according to a recently released annual report from the General Assembly's Fiscal Research Division.

The vast majority of that spending -- more than 92 percent -- came in the form of tax expenditures, including tax exemptions for goods, services and equipment.

Sales tax exemptions accounted for nearly $700 million, with the bulk of those exemptions going to sales to farmers ($244 million), purchases of mill machinery ($178 million) and packaging costs for manufacturers and retailers ($120 million).

Economic development grants accounted for $37 million, with the state's Commerce Department allocating $31.4 million of that.

Morning Memo: Questions mount on MetLife incentives deal

FIVE DAYS LATER, McCRORY STILL SILENT ON ROLE IN METLIFE DEAL: Five days after the MetLife jobs announcement, Gov. Pat McCrory and the governor's office remains quiet on what role he played in luring the company even as questions mount. Consider this lead sentence from AP story Friday: "Gov. Pat McCrory avoided questions Friday about the state offering MetLife Inc. $94 million in tax breaks and other incentives to move thousands of jobs to North Carolina and using his former employer to help broker the deal." The Friday announcement was the second time in two days that McCrory dodged reporters' questions. The governor appears at the Department of Environment and Natural Resources today for a 12:30 p.m. announcement. Will he break his silence?

QUESTIONS MOUNT ABOUT THE INCENTIVES: At the same time, Charlotte area officials are raising questions about whether the incentives were even necessary to lure the company to the city, where half the 2,600 jobs will be located. On Saturday, less than 24 hours after a press conference announcing the deal, county commissioners questioned whether MetLife knew it was coming to Charlotte before commissioners on Tuesday gave preliminary approval for the incentives.

Commissioners Chairwoman Pat Cotham said questions about the timing of the incentives vote started to enter her mind when news broke that the company had picked North Carolina and media events were arranged – only two days after the commissioners voted. Later, she learned that some MetLife executives had already been picking out schools and colleges for their children. “In my opinion, the deal was done when we first learned of it and voted for incentives,” Cotham, a Democrat, wrote in her first email to commissioners on Saturday.

***Good morning and thanks for reading the Dome Morning Memo -- the source for N.C. political news and analysis. Read much more below.***

Gov. McCrory uses big incentives to lure MetLife jobs

The insurance giant MetLife plans to add more than 2,600 high-paying jobs in Cary and Charlotte over the next three years after being awarded a state incentives package worth more than $94 million this morning. MetLife expects to invest $125.5 million as part of the project.

“We’re proud that a strong corporate partner like MetLife has decided to invest in North Carolina,” said Gov. Pat McCrory in a statement. “These jobs will complement our financial services sector in Charlotte and our high-tech hub in Wake County, two distinct sectors we want to expand.”

The state’s Economic Investment Committee approved an incentives package for the company at its meeting in Raleigh this morning. MetLife received a 12-year state Job Development Investment Grant worth as much as $87.3 million if it meets hiring and investment goals. MetLife also must retain the 143 employees it now has in Charlotte.

The company is also receiving millions in training credits and a $2 million grant from the One North Carolina fund. More here.

House Speaker offers mixed messages on collapse of Continental Tire deal

UPDATED: House Speaker Thom Tillis described the failure of the Continental Tire deal this way when speaking to a Robeson County group late last week: "I'm disappointed. It's a terrible loss. But the property ownership was not the issue. There were other factors and some honest disagreements between the governor and Senate."

The Robesonian also reported that Tillis said the Project Soccer didn't sink as a result of property ownership by a state senator and Democratic campaign donors.

But this week Tillis took a different tone speaking Tuesday to a group in Hickory: "We (the General Assembly) never got a deal to vote on (from the governor). I lay the failure … at the feet of the governor. The governor needs to recognize we are co-equal branches … and the legislature needs to be involved in the process. She can’t assume her plans will be approved by default."

The Hickory Record also reported that Tillis said the land deal may have been a factor in the company locating in South Carolina.

So why the change in tone? 

One possible explanation may be the reporters' different translation of Tillis' remarks -- but the quotes also speak for themselves.

Tillis spokesman Jordan Shaw said the Robesonian story didn't capture the whole picture and Tillis was more direct the second day in his Hickory remakrs. Shaw also said its too difficult to draw conclusions from the limited picture provided in the two news stories.

The difference also could be one of GOP messaging. As the left-leaning N.C. Policy Watch noted recently, Tillis is diverging from the Republican spin out of Senate President Phil Berger's office on from the day the deal collapsed. The GOP tried to smear Perdue with a "pay-to-play politics" label because of questions surrounding the land deal. But as we've noted before and again, even Berger stopped trumpeting the land-deal claim.

Democrats contend the real answer why the deal collapsed lies in Tillis' Robeson County remarks: the GOP just couldn't agree on whether they supported an incentives package.

Hayes says Perdue should explain veto threat

State GOP Chairman Robin Hayes says Gov. Bev Perdue needs to explain her decision to possibly veto a bill that would save the state money in light of her son's job on a law firm's economic development team.

Perdue has hinted strongly that she plans to veto Senate Bill 13, which would scoop up money from state accounts -  including about $8.2 million in economic incentives -  to spend next year.

As the N&O reported Sunday, Perdue's son, Garrett, works on the the economic development team of one of the state's largest law firms, Womble Carlyle. Companies represented by his firm have landed multimillion-dollar incentives packages from the Perdue administration.

“Once again, Governor Perdue has some explaining to do," Hayes said in a statement.

"Senate Bill 13 was put forward by the Republican legislature because it would save millions and empower all North Carolina businesses to grow jobs.  If Governor Perdue vetoes Senate Bill 13, it demonstrates her continued belief she gets to pick economic winners and losers.  Over the past two years, it is clear her son and those politically connected to the Perdue family continue to win at taxpayers’ expense.”

Perdue ready to fight on schools and incentives

As she prepares to deliver her State of the State Address and to release her budget, Democratic Gov. Bev Perdue appears to be girding for battle to protect education spending and public incentives for companies which bring jobs.

Speaking to the state AFL-CIO meeting at a downtown Raleigh hotel this morning, Perdue said Republican legislative efforts take funds for economic incentives was already creating concern among corporate executives looking at North Carolina.

“They want to be assured  that North Carolina will honor its economic promises,” Perdue said. “This is not a good conversation...They have an ability to choose from five or six or or 20 states. This is hard to try to explain to them.”

Perdue is expected to deliver her State of the State address Monday night, and her budget proposal several days later.

Although she did not tip her hand, she said “I'm going to make tough decisions.”

She said she had been reading a lot of history lately, and thought about some of the difficult decisions made by Democratic governors such as Jim Hunt and Terry Sanford and Republican governors such as Jim Martin and Jim Holshouser.

“You don't go backwards, when you need to go forward,” she said.

“Every decision that will take resources away from your child's public school is a bad decision for North Carolina,” Perdue said. “Every decision that will take resources away from our ability to compete globally for jobs and industry is a bad decision.”

Among the politically difficult issues she has been considering is whether to propose the extension of the $1.3 billion temporary tax increase that is scheduled to expire June 30th and whether to have the state regulate the video gaming industry.

'Deacon' project tax breaks debated

A company considering building a data center in Alamance County wants its taxes calculated in a different way.

House members debated an incentives bill that touches on how film incentives are calculated. But it also allows a company to apply to have it taxes calculated in a fashion different than other corporations in the state.

Rep. Pryor Gibson, a Wadesboro Democrat, said the provision applied specifically to an economic incentives project code named "Deacon."

That's a project in Alamance County. Published reports have suggested the company is Microsoft, although state and local officials keep the identify of companies secret. A different bill also gives the project tax breaks on purchases of equipment and electricity.

The bill invited comparisons on the House floor to a similar tax break scheme the state gave to Apple. Opponents to the idea said they feared the precedent of giving a single company an special exemption out of the tax code.

Rep. Jennifer Weiss, a Raleigh Democrat, said she reluctantly voted in favor of the Apple incentives because the company was prepared to make a $1 billion investment. The Alamance County project is worth half that.

"What we're talking about is a company that wants to pay a lot less and doesn't really have a valid reason except "Virginia is going to do it," Weiss said.

The House voted in favor of the bill 73 to 34. It now goes to the governor for her signature.

Health care repeal has risks

RISKY BUSINESS: Top Republicans are increasingly worried that GOP candidates this fall might be burned by a fire that's roaring through the conservative base: demand for the repeal of President Barack Obama's new health care law.

It's fine to criticize the health law and the way Democrats pushed it through Congress without a single GOP vote, these party leaders say. But focusing on its outright repeal carries big risks. (AP)

GOING, GOING...A member of North Carolina's auctioneer regulatory board has resigned after disclosures that he had been previously reprimanded and has a criminal past.

Lloyd "Mickey" Meekins Jr. of Lumberton, who owns an auction company, submitted his resignation late Monday, a day after a report in The News & Observer detailed some aspects of his background.

The resignation letter was released Tuesday by the office of Gov. Bev Perdue, a Democrat who appointed Meekins last year to the auction board, which licenses and regulates auctioneers. (N&O)

INCENTIVES, THEN CHICKEN PLANT: If it can score the right mix of incentives, a Mississippi poultry processing company plans a major expansion, making it a major economic engine for Eastern North Carolina. (N&O)

House shreds paper incentives — twice

North Carolina legislators spent two days preparing to give a Canadian paper company up to $10 million before hitting the brakes on Thursday.

The House twice voted by narrow margins late Thursday to reject a proposal to give Montreal-based Domtar Corp. up to $2 million a year for five years, the Associated Press reports. The Senate approved the spending on Wednesday, the same day lawmakers approved a budget that included a $1 billion tax increase and service cuts worth billions more.

Domtar plans to stop making white office paper at its mill near Plymouth, but sees a market opportunity to turn loblolly pine trees into the absorbent fluff used in diapers, state officials said.

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