Welcome to Bob Orr 101: The Constitution and the Governor's Race 2008. Please have a seat.
Today, we'll be discussing Article V, Section 2(7), of the state Constitution, which says the state may appropriate money to a business only for "public purposes."
In Maready v. Winston Salem in 1996, the Supreme Court found in a 5-2 vote that cash and tax breaks given to 24 companies in Forsyth County met that test because they created jobs and helped the tax base grow.
Orr, then a Supreme Court justice, disagreed, saying the incentives were "corporate welfare."
"If a potential corporate entity is considering a move to Winston-Salem but will only come if country club memberships are provided for its executives, do we sanction the use of tax revenue to facilitate the move?" he wrote.
According to Orr, the recruitment of corporations through incentives only provided minimal job and tax base growth and hurt small communities that can't compete.
He also said the expenditures failed "the ultimate test for determining public purpose" by benefiting special interests as opposed to the public in general.
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