AP analysis: N.C. bathroom bill will cost state $3.8B in business
Law limiting LGBT rights leads firms to locate elsewhere.
Despite Republican assurances that North Carolina’s “bathroom bill” isn’t hurting the econ- omy, the law limiting LGBT protections will cost the state more than $3.76 billion in lost business over a dozen years, according to an Asso- ciated Press analysis.
Over the past year, North Carolina has suffered finan- cial hits ranging from scut- tled plans for a PayPal facil- ity that would have added an estimated $2.66 billion to the state’s economy to a canceled Ringo Starr concert that deprived a town’s amphi- theater of about $33,000 in revenue. The blows have landed in the state’s biggest cities as well as towns surrounding its flagship university, and from the mountains to the coast.
North Carolina could lose hundreds of millions more because the NCAA is avoiding the state, usually a favored host. The group is set to announce sites for various championships through 2022, and North Carolina won’t be among them as long as the law is on the books. The NAACP also has initi- ated a national economic boycott.
The AP analysis — compiled through interviews and public records requests — represents the largest reck- oning yet of how much the law, passed one year ago, could cost the state. The law excludes gender identity and sexual orientation from statewide anti-discrimination protections, and requires transgender people to use restrooms corresponding to the sex on their birth certif- icates in many public build- ings.
Still, AP’s tally is likely an underestimation of the law’s true costs. The count includes only data obtained from businesses and state or local officials regarding projects that canceled or relocated because of HB2. A business project was counted o nly if AP determined through public records or interviews that HB2 was why it pulled out.
Some projects that left, such as a Lionsgate television production that backed out of plans in Charlotte, weren’t included because of a lack of data on their eco- nomic impact.
The AP also tallied the losses of dozens of conventions, sporting events and concerts through figures from local officials. The AP didn’t attempt to quantify anecdotal reports that lacked hard numbers, or to fore- cast the loss of future con- ventions.
Bank of America CEO Brian Moynihan — who leads the largest company based in North Carolina — said he’s spoken privately to busi- ness leaders who went elsewhere with projects or events because of the controversy.
“Companies are moving to other places because they don’t face an issue that they face here,” he told a World Affairs Council of Char- lotte luncheon last month. “What’s going on that you don’t know about? What convention decided to take you off the list? What location for a distribution facility took you off the list? What corporate headquarters con- sideration for a foreign com- pany — there’s a lot of them out there — just took you off the list because they just didn’t want to be bothered with the controversy? That’s what eats you up.”
Other measures show the country’s ninth most-pop- ulous state has a healthy economy. By quarterly gross domestic product, the federal government said, North Carolina had the nation’s 10th fastest-growing economy six months after the law passed. The vast majority of large companies with existing operations in the state — such as American Airlines, with its second-largest hub in Charlotte — made no public moves to financially penalize North Carolina.
Shortly after he signed the law, Republican then-Gov. Pat McCrory issued a state- ment assuring residents it wouldn’t affect North Car- olina’s status as “one of the top states to do business in the country.”
HB2 supporters say its costs have been tiny com- pared with an economy estimated at more than $500 billion a year, roughly the size of Sweden’s. They say they’re willing to absorb those costs if the law prevents sexual predators posing as transgender people from entering private spaces to molest women and girls — acts the law’s detractors say are imagined.
Republican Lt. Gov. Dan Forest issued a statement Monday accusing the AP of “another attempt to mislead and confuse the public through a bogus headline.” Forest questioned the tally and said even if true, it would represent only a sliver of the state’s economy.
Forest recently told Texas legislators considering a similar law: “Our economy is doing well. Don’t be fooled by the media.”
He has said that a global equestrian competition coming to North Carolina in 2018 despite HB2 is projected to have an economic impact bigger than the sporting events that have canceled. The Swiss-based group behind the event estimated its spending poured about $250 million into the French region of Normandy the last time it was held — 2014.
Meanwhile, the state’s governor — Democrat Roy Cooper, who has long opposed HB2 — responded to AP’s story by saying: “We now know that, based on conservative estimates, North Carolina’s economy stands to lose nearly $4 billion because of House Bill 2. That means fewer jobs and less money in the pockets of middle class families. We need to fix this now.”
And AP’s analysis shows the economy could be growing faster if not for projects that have canceled.
Those include PayPal canceling a 400-job project in Charlotte, CoStar backing out of negotiations to bring 700plus jobs to the same area, and Deutsche Bank scuttling a plan for 250 jobs in the Raleigh area. Other companies that backed out include Adidas, which is building its first U.S. sports shoe factory employing 160 near Atlanta rather than a High Point site, and Voxpro, which opted to hire hundreds of customer support workers in Athens, Ga., rather than the Raleigh area.
“We couldn’t set up operations in a state that was discriminating against LGBT” people, Dan Kiely, Voxpro founder and CEO, said in an interview.