According to an Associated Press analysis, North Carolina’s “bathroom bill”, which limits LGBT protections, will cost the state more than $3.76 billion in lost business over a dozen years, despite Republican assurances that the law isn’t hurting the economy.
Financial hits:
North Carolina has suffered financial hits over the past year. It ranged from cancelled 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 NCAA is also avoiding the state despite it being a favorite host in the past, stating that it won’t be considered for championship events from 2018 to 2022 “absent any change” in the law, which it views as discrimination.
In a bid to end the backlash, State legislators voted Thursday to roll back the law. But the deal was condemned by both sides; conservatives are defending the current law, and gay and transgender activists are demanding full repeal.
The law excludes gender identity and sexual orientation from statewide antidiscrimination protections, it also requires transgender people to use restrooms corresponding to the sex on their birth certificates in many public buildings.
AP’s estimate probably underestimates the law’s true costs because a business project only counted if AP determined through public records or interviews that HB2 was why it pulled out. They also tallied the losses of dozens of conventions, sporting events and concerts through figures from local officials and didn’t attempt to quantify reports that lacked hard numbers, or forecast the loss of future conventions.
Some business leaders took their projects elsewhere because of the controversy, according to Bank of America CEO Brian Moynihan, and he fears more decisions like that are being made quietly.
Law supporters respond:
But other measures show North Carolina’s economy is healthy. Six months after the law passed, North Carolina had the nation’s 10th fastest-growing economy according to quarterly gross domestic product. And most large companies with existing North Carolina operations have made no public moves to financially penalize the state
The law’s supporters say they’re willing to absorb those costs if the law prevents predators from posing as transgender people to commit assaults in restrooms, acts entirely imagined as per the law’s critics.
Republican Lt. Gov. Dan Forest questioned AP’s report, saying that even if true, it would represent only a sliver of the state’s economy.
However, Gov. Cooper who opposes the law, said “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.”
The cancelled plans include PayPal terminating a 400-job project in Charlotte, CoStar backing out of negotiations to bring 700-plus 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 Georgia, rather than North Carolina.
Dan Kiely, Voxpro founder and CEO, said in an interview “We couldn’t set up operations in a state that was discriminating against LGBT” people.
The PayPal expansion would have contributed more than $200 million annually to North Carolina’s economy. By the end of 2028, the state expected PayPal to have added $2.66 billion, while the Deutsche Bank project estimated a total impact of about $543 million by the end of 2027.
Meanwhile, more than $196 million were deprived from the state due to canceled conventions, concerts and sporting events.
By the end of 2028, the state will have missed out on more than $3.76 billion. These losses are based on projects that already went elsewhere, meaning that the money won’t be recovered even if the law is repealed.
By the end of 2017 alone, the lost business will total more than $525 million.
Tourism officials in several cities say they typically track large conventions but don’t have firm numbers when smaller groups cancel, or rule out North Carolina before booking.
Shelly Green, CEO of the Durham Convention & Visitors Bureau said “The biggest impact is how many times our phones are not ringing now.” She added that several sporting events and conventions that canceled have deprived the city of about $11 million.
