This month marked a full year since North Carolina’s Republican state lawmakers forced through HB2, a bill requiring discrimination against transgender people in public venues. The legislature is now gridlocked over removing the discriminatory law in its entirety, but it remains on the books.
It’s costing the state a fortune.
A new analysis from the Associated Press estimates that over the next dozen years, HB2 will cost North Carolina more than $3.76 billion in lost business. And that number will increase by hundreds of millions of dollars if the NCAA follows through on the threat it made last week to block the state from hosting any events through 2022. The NCAA is making those placement decisions this week.
According to the AP, its estimate is low. The analysis only included figures that could be directly tabulated, which left out plenty of consequences that are harder to measure. For example, HB2 prompted Lionsgate to back out of plans to shoot a television pilot in North Carolina, but the AP didn’t include this in its analysis because there wasn’t enough information available to determine the specific economic impact of that lost project. Also missing is how much isn’t being spent by the many cities and states that have banned public funding for travel to North Carolina.
What the AP did include was prominent job losses when companies like PayPal, Deutsche Bank, and CoStar Group abandoned expansions in North Carolina that would have created hundreds of jobs each. The AP analysis used data from the Job Development Investment Grant program, which estimates how much a company could add to the state’s economy over that period of time through such expansions.
The AP also reached out to various tourism officials and planners to estimate the costs of lost sporting events, conventions and conferences, and concerts that bring more money to the state. Small businesses that depend on these kinds of events have already reported significant losses: the customers they depend on just aren’t coming to the state at the same rate these businesses have seen in years past.
These numbers starkly contradict what state officials defending HB2 have been telling the public. Though Gov. Pat McCrory (R) lost his job after defending the discriminatory law, Lt. Gov. Dan Forest (R) kept his, and he’s been publicly trying to counter the narrative that discrimination is bad for business.
Last month, for example, he joined the Family Research Council, an anti-LGBT hate group, to claim that North Carolina’s economy is doing “extremely well.” Boasting accolades from business magazines, Forest insisted, “Businesses are still moving here, people are still moving here in record numbers.” He also tried to reframe the losses, describing $250 million lost to the NCAA and other sporting events as merely, “less than one quarter of one percent of our annual GDP in our state. Is it significant? Well, it is what it is.” He accused businesses making decisions in the state based on HB2 as engaging in “extortion.”
Forest also took his show to Texas, testifying on behalf of SB6, a bill very similar to HB2 that Texas lawmakers are considering. There, he used his same “drop-in-the-bucket” argument, which was exactly how PolitiFact framed the loss when fact-checking a different claim McCrory had made last year to downplay the economic impact. PolitiFact defended Forest for his .1 percent argument, but disputed some of his other claims.
Forest’s arguments don’t paint a full picture of the costs of HB2. North Carolina may still be doing well according to some economic indicators, but that doesn’t mean it wouldn’t otherwise be doing far better. This is particularly true if, as the AP reports, many other companies are making similar decisions to avoid North Carolina more quietly. Likewise, the impact of many of the boycotts hasn’t been felt yet. In some cases, the effects of cancellations or quiet boycotts might not be felt for years to come.
It also doesn’t account for how localized the losses will be—concentrated mostly in the cities that have convention centers and other large venues. Small businesses who depend on convention foot-traffic may feel those losses acutely, and that future impact isn’t included in the analysis. The economic losses would also have a compounding effect on the cities themselves, who each year would have less to invest in the marketability of their cities.
Whether AP’s reporting has a chilling effect on lawmakers in Texas and the many other states weighing anti-transgender bills remains to be seen.