A year after North Carolina enacted a law regulating transgender people’s use of public restrooms, sparking boycotts and costing the state jobs and sports events alike, a new analysis says the legislation’s economic fallout is greater than previously estimated.
North Carolina has grappled with protests, lost tourism dollars and high-profile rebukes from sports leagues including the NBA and NCAA since it enacted the measure known as House Bill 2 (or “H.B. 2″) in March 2016. While the law is best known for its provisions requiring people to use public restrooms that match the sex on their birth certificates instead of their gender identities, it also has a broader sweep, limiting some minimum-wage standards and reversing local ordinances that expanded protections for LGBT people.
Opponents of the bill, including then-President Barack Obama’s Justice Department, said the measure was discriminatory, while supporters defended it as necessary for personal security and privacy. The NBA pulled its All-Star Game from North Carolina, the NCAA withdrew a number of sporting events — including men’s basketball tournament games that would have been played there this month — and Bruce Springsteen, Pearl Jam, Ringo Starr and Cirque du Soleil performances were all scrapped.
The single biggest loss included in the AP’s count did not come from any of the relocated major sporting events or canceled shows. Instead, most of the losses the AP tallied came from a tech company calling off big plans for the state just days after then-governor Pat McCrory (R) signed the law.
PayPal, the online payments firm based in California, had said it planned to open a global operations center in Charlotte, which McCrory’s office said would pump millions into Mecklenburg County and employ 400 people. But the following week, McCrory quickly signed H.B. 2, which PayPal’s president and chief executive said “perpetuates discrimination and … violates the values and principles that are at the core of PayPal’s mission and culture.”
The expansion was off. And according to a North Carolina Commerce Department analysis the AP cited, the impact was massive, as officials there expected PayPal to put more than $2.6 billion into the state’s economy by 2028.
PayPal was effectively the first major domino to fall. Deutsche Bank, the German financial giant, quickly called off its own expansion that it said would have added 250 new jobs at a facility not far from the state capital in Raleigh. The state Commerce Department had expected the bank to add more than $500 million to the state’s economy, according to the AP, which makes it the second-biggest loss in the wire service’s new analysis. (This is roughly equal to what some previous assessments pegged as the total cost of the bill, with those putting the tally at somewhere between $450 million and $630 million.)
The AP analysis also lists the losses from a number of sporting events, led by the NBA’s All-Star Game, which Charlotte city officials had said could be worth $100 million. There could be more sports-related losses coming: The NCAA said last week that “absent any change in the law,” its position on having events in North Carolina would remain the same, a statement that doubled as an ultimatum because it will select collegiate championship sites next month.
State lawmakers have discussed rescinding the controversial law, but repeal efforts have repeatedly fallen short, including a marathon special legislative session in December called for that very purpose. A spokesman for Gov. Roy Cooper (D), who has long opposed the law, did not immediately respond to a request for comment Monday.
North Carolina Senate President Pro Tempore Phil Berger (R) said in a statement Monday that lawmakers continue “to work toward a reasonable compromise that ends the distraction of” the bill. As a way to illustrate the state’s economic outlook, Berger also pointed to federal statistics released by the Commerce Department last month showing that North Carolina’s real gross domestic product went up by 4.5 percent in the third quarter last year.
“According to the latest U.S. Department of Commerce report, North Carolina’s economy was the fastest growing in the southeastern United States and is expected to generate $6-7 trillion in state GDP over the next 12 years — meaning even if the AP’s analysis were accurate, [H.B. 2]’s total economic impact over that same period would be less than one half of one tenth of one percent,” Berger said.