AP anal­y­sis: N.C. bath­room bill will cost state $3.8B in busi­ness

Law lim­it­ing LGBT rights leads firms to lo­cate else­where.

Austin American-Statesman - - MORE OF TODAY’S TOP NEWS - By Emery P. Dale­sio and Jonathan Drew

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.

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