North Carolina’s Republican administration continues to defend its anti-LGBT law, House Bill 2 (HB2), but media outlets have documented the economic harm the law has done to the state, including backlash from the business community and the potential loss of federal funds.
North Carolina Passed A Law Rescinding LGBT Nondiscrimination Protections.
On March 23, the North Carolina state legislature passed HB2, a "sweeping" law that invalidated local governments' ability to provide legal protections for LGBT people and limited transgender people's bathroom access in certain public bathrooms. The law came in response to a local ordinance passed in Charlotte that provided nondiscrimination protections for LGBT people, including allowing transgender individuals to use the bathroom that aligns with their gender identity. [The Charlotte Observer, 3/23/16]
The Atlantic: After Weeks of Criticism, North Carolina Governor McCrory Is Attempting To “Blunt The Backlash” To Anti-LGBT Law.
On April 12, faced with a pending ACLU lawsuit and in response to weeks of national backlash, NC’s Gov. Pat McCrory issued a "nearly meaningless” executive order clarifying HB2. As The Atlantic noted, “there is no change to the transgender-bathroom conditions,” and it “does not restore cities’ right to establish local non-discrimination ordinances that apply to the private sector.” [The Atlantic, 4/12/16]
North Carolina’s Commerce Secretary “Doesn’t Expect The Legislation To Negatively Impact The State’s Economy.”
In an interview with the Triangle Business Journal, North Carolina Department of Commerce Secretary John Skvarla said he doesn’t expect the legislation to negatively impact the state's economy:
In an interview, he said he has heard from companies “considering their options” but none that expressly decided to leave North Carolina because of the bill, which the LGBT community has decried as discriminatory to transgender people. “I have not had anyone ask any penetrating questions,” Skvarla said.
On Thursday, Skvarla said he has “not seen a diminution in the pipeline” of companies interested in an investment in North Carolina. “As far as I’m concerned, it’s business as usual,” he said. [Triangle Business Journal, 4/5/16]
CAP: HB2 Threatens More Than Half Billion Dollars In Economic Activity.
According to a report from the Center for American Progress based on publicly available estimates of the economic impact of lost or at-risk business activity or events, the North Carolina economy could potentially lose out on more than $568 million in private-sector economic activity through 2018. According to the report, the state has already lost out on $86 million and stands to lose upwards of an additional $481 million due to cancelled events, businesses leaving the area, and tourism declines if HB2 is not repealed. [The Center for American Progress, 4/13/2016]
WSOC TV: Charlotte's Economy Suffers Due To Four Confirmed And Nine Potential Event Cancellations.
On April 11, local news outlet WSOC TV reported on the economic impact of HB2 in Charlotte:
Charlotte tourism sources told anchor Scott Wickersham on Friday that four groups canceled conventions because of HB2.
Nine were in talks but sources said they decided not to come to Charlotte.
Almost 30 more are on the fence because of HB2.
For those four confirmed events, there would’ve been more than 1,100 nights booked at hotels.
For the groups considering, that would have been more than 1,200 rooms booked and for the hesitant groups that's nearly 90,000 rooms now hanging in the balance. [WSOCTV.com, 4/11/16]
Washington Post: Raleigh Stands To Lose Contracts For Multiple Events That Would Bring The Local Economy Millions of Dollars.
An April 12 Washington Post article reported on more economic impacts to the state from HB2:
Officials in the state are already reporting tourism losses and event cancellations due to the law. As of this week, five groups canceled events planned in the Wake County region, which would have brought the local economy more than $732,000, according to the Greater Raleigh Convention and Visitors Bureau.
Another 16 groups were about to sign contracts to hold events and are considering canceling or changing their minds, according to a spokesman for the visitors bureau. These groups could bring a combined 73,000 people and $24 million to the region.
The visitors bureau did not identify these 16 other groups in a report released by Denny Edwards, president and chief executive of the visitors bureau. But the report did say that one of the biggest hits would come if Raleigh lost its chance to host an unspecified sports tournament, one that the bureau said could bring in $4.5 million to the local economy. [The Washington Post, 4/12/16]
The Atlantic: Bruce Springsteen Cancels His North Carolina To Boycott Anti-LGBT Law.
Bruce Springsteen and the E Street Band announced that they were cancelling their April 10 show in Greensboro, NC. Over 15,000 tickets had been sold for the show and officials estimated the cancellation resulted in a $100,000 loss at the venue alone:
City officials did not have a dollar estimate for the lost revenue from foot traffic in restaurants, shops and hotels. Mayor Nancy Vaughan said it would be difficult to quantify as some concertgoers could have become repeat visitors to Greensboro.
“We had so many people that would have been able to see Greensboro, many for the first time, and now we won’t have that hotel and restaurant revenue,” she said. “My other concern is that acts we are currently in negotiations with could look at other venues. People we don’t have contracts with can just automatically take us off the list.”
The cancellation also means lost wages for some workers. At the coliseum, several hundred employees were scheduled to work the concert, according to Brown. [The Atlantic, 4/12/16]
The Charlotte Observer: Some High-Profile Sporting Events Have An Uncertain Future In North Carolina.
According to a statement from the NBA, HB2 could affect the likelihood of Charlotte “successfully hosting” the 2017 NBA All-Star Game. Other athletic associations have expressed concern over the new law, including the Atlantic Coast Conference (ACC) and the U.S. Golf Association, which conducts the U.S. Open and the U.S. Women’s Open. [The Charlotte Observer, 3/30/16]
Several Companies Have Canceled Multimillion Dollar Expansion Projects Due To Anti-LGBT Law
WRAL.com: Citing HB2, PayPal Cancels Planned Expansion In Charlotte. PayPal announced on March 18 that they would open a $3.5 million complex in Charlotte, employing 400 people, and having an annual payroll of about $20.7 million. On April 5, the company retracted its decision, citing the governor signing HB2 into law, stating the new law "perpetuates discrimination and it violates the values and principles that are at the core of PayPal's mission and culture.” [WRAL.com, 4/5/16]
Associated Press: Drug Company Reconsiders Building $20M Factory In North Carolina Because Of Anti-LGBT Law.
The Associated Press reported on April 10 that “New Jersey-based Braeburn Pharmaceuticals said it is ‘reevaluating our options based on the recent, unjust legislation’ whether to build a $20 million manufacturing and research facility in Durham County.” AP further reported that the facility would create 50 new jobs, paying an average salary of nearly $76,000. [Associated Press, 4/10/16]
NY Times: Deutsche Bank Freezes Expansion In North Carolina, Citing HB2 As The Reason For Halting Growth.
The German “financial giant” withdrew plans to expand its technology development center in Cary, NC, which already boasts 900 employees, citing HB2 as the reason for halting its growth. The company planned on spending $9 million on the expansion, creating an additional 250 jobs that were expected to have a total salary package upwards of $21 million annually. [The New York Times, 4/12/16]
North Carolina Could Face Potential Loss Of Federal Funding And Other State Governments’ Spending.
The Washington Post reported on April 4 that at least five federal agencies are in the process of reviewing whether to withhold funds from NC in response to HB2:
The ongoing reviews at the Education, Transportation, Labor, Housing and Urban Development, and Health and Human Services departments are not yet complete, and it is unclear how much federal money might be involved. But the Obama administration’s decision to scrutinize what White House press secretary Josh Earnest described as “both policy and legal questions that are raised by the passage of this law” suggests that the measure signed by Gov. Pat McCrory (R) last month could have major implications for his state.
Earnest said that “individual agencies are undertaking” the review, and the White House had not issued specific guidance on how to proceed. But he emphasized that President Obama said that “ensuring that individual Americans are not discriminated against because of who they love is something that the president feels strongly about,” and he was not surprised that North Carolina officials “are feeling some pressure” on the issue.
“I can just say that, more generally, this administration is committed to defending and even promoting the equal rights of all Americans, including LGBT Americans,” he added. [The Washington Post, 4/4/16]