Bathroom bill a $3.7B drain on N. Carolina
An Associated Press analysis shows that, despite Republican assurances that North Carolina’s “bathroom bill” isn’t hurting the economy, the law limiting LGBT protections will cost the state more than $3.76 billion in lost business.
RALEIGH, N.C. — Despite Republican assurances that North Carolina’s “bathroom bill” isn’t hurting the economy, the law limiting LGBT protections will cost the state nearly $3.8 billion in lost business over a dozen years, according to an Associated Press analysis.
Over the past year, North Carolina has suffered financial hits ranging from scuttled plans for a PayPal facility 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 amphitheater 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 for sports events. 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 initiated a national economic boycott.
The AP analysis — compiled through interviews and public records requests — represents the largest reckoning yet of how much the law, passed one year ago, could cost the state. The law excludes gender identity and sexual
orientation from statewide antidiscrimination protections, and requires transgender people to use restrooms corresponding to the sex on their birth certificates in many public buildings.
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 only 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 economic 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 forecast the loss of future conventions.
Bank of America CEO Brian Moynihan — who leads the largest company based in North Carolina — said he’s spoken privately to business leaders who went elsewhere with projects or events because of the controversy, and he fears more decisions like that are being made quietly.
“Companies are moving to other places because they don’t face an issue that they face here,” he told a World Affairs Council of Charlotte 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 consideration for a foreign company — 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 populous 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 secondlargest hub in Charlotte — made no public moves to financially penalize North Carolina.
Shortly after he signed the law, then-Gov. Pat McCrory, a Republican, issued a statement assuring residents it wouldn’t affect North Carolina’s status as “one of the top states to do business in the country.”
HB2 supporters say its costs have been tiny compared 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.
Lt. Gov. Dan Forest, one of the strongest supporters, accused news organizations of creating a false picture of economic upheaval.
A global equestrian competition that’s coming to North Carolina in 2018 despite HB2 is projected to have an economic impact bigger than the sporting events that have canceled, Forest said. The Swissbased group behind the event estimated its spending poured about $250 million into the French region of Normandy the last time it was held — 2014. The organization said the figure came from a study by consulting and accounting firm Deloitte, but the Federation Equestre Internationale declined to release the report.
Forest declined a request for an interview based on AP’s analysis.
“The effect is minimal to the state,” Forest told Texas legislators considering a similar law. “Our economy is doing well. Don’t be fooled by the media. This issue is not about the economy. This issue is about privacy, safety and security in the most vulnerable places we go.”
But AP’s analysis shows the economy could be growing faster if not for projects that have already canceled. And Texas House Speaker Joe Straus this month expressed concern over the potential effect of the bathroom bill on Texas’ economy.