Money Talks

The Profit North Carolina Sees in LGBT Prejudice

North Carolina is already counting the multimillion-dollar cost of its ‘bathroom bill.’ But for the bill’s backers, anti-LGBT ideology trumps economics.

Photo Illustration by Sarah Rogers/The Daily Beast

Does money matter to political opponents of LGBT equality?

That’s a question worth asking as North Carolina faces the possibility of five years without NCAA championship events over its “bathroom bill” HB2, and as Texas Lieutenant Governor Dan Patrick pushes hard for anti-transgender bill SB6 despite the possible costs to the Lone Star State.

LGBT advocates frequently cite the economic impact of anti-LGBT legislation to argue against its passage or for its repeal. It’s a powerful argument that’s borne fruit in the past; even Mike Pence rolled back his home state’s infamous 2015 “Religious Freedom Restoration Act” because he wanted to “make it clear that Indiana is open for business.”

But what happens when that tactic doesn’t work?

On Monday, for example, the North Carolina Sports Association sent state legislators a letter warning them that the National Collegiate Athletics Association could withdraw all North Carolina cities from consideration for hosting championship games through the 2021-2022 season, as the News and Observer reported.

The letter warned that the state “could lose upwards of a half-billion dollars in economic impact” if the NCAA took North Carolina cities out of the running.

North Carolina’s new Democratic governor, Roy Cooper, promptly cited that letter—and the “hundreds of millions of dollars” that North Carolina has already lost—as proof of the “urgency” with which HB2 must be repealed.

But still, HB2 remains on the books. And a deal to repeal it spectacularly failed in the final hours of 2016 under economic pressure that was already considerable.

So does money not talk after all?

Dan Rafter, spokesperson for the anti-discrimination group Freedom for All Americans, told The Daily Beast that the economic argument for LGBT equality is still “certainly one of the most compelling” and effective but it may have met its match in North Carolina.

“I think North Carolina is an example where the legislature skews to the far right,” he told The Daily Beast. “There are folks in the North Carolina legislature who are very committed to advancing discrimination at any cost to the state’s economy and the state’s brand.”

That cost has already been steep. The economic consequences that North Carolina has been suffering because of HB2 include but are not limited to: the NBA canceling the 2017 All-Star Game in Charlotte, celebrities and musicians like Bruce Springsteen pulling out of scheduled events, and companies like Paypal and Deutsche Bank taking planned new jobs elsewhere.

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PolitiFact analyses have shown that, while some LGBT advocates in North Carolina may have initially overestimated the economic impact of HB2, the Tar Heel State has still “undeniably lost money and jobs due to HB2,” to the tune of tens of millions of dollars at the very least.

But North Carolina’s woes have not been enough to dissuade some Texas politicians from considering SB6—a bill that, as The Daily Beast’s Jay Michaelson reported, would restrict bathroom use by birth certificate, much like HB2.

Texas Lieutenant Governor Dan Patrick has been championing the bill and shrugging off the possibility of a North Carolina-style economic impact. On Monday—the same day the North Carolina Sports Association sent its potentially game-changing letter to the state legislature—Patrick claimed that a recent study projecting losses of up to $8.5 billion for Texas if it passed SB6 had been totally discredited by PolitiFact, as the Austin American-Statesman reported.

“There is no evidence whatsoever that passage of Senate Bill 6 will have any economic impact on Texas,” said Patrick. “They’ve lost their argument. It’s gone.”

But the author of that PolitiFact analysis took to Twitter to point out that there’s a lot of room between $8.5 billion and $0.

Texas would almost certainly experience economic consequences if it passed SB6, as evidenced by the widespread opposition to the bill among the state’s businesses. It may not be $8.5 billion, but it will certainly hurt the bottom lines of small shop owners and large corporations alike—and the Texas legislature might rein in Patrick’s enthusiasm for that very reason.

Republican Texas House Speaker Joe Straus has said that SB6 is “not the most urgent concern of mine” and that the legislature should “be very careful about doing something that can make Texas less competitive for investment, jobs, and the highly-skilled workforce needed to compete.”

If SB6 fails, Rafter would see that as proof that the economic argument still works—and that the North Carolina legislature is truly exceptional in its opposition to LGBT equality at all costs.

“North Carolina certainly has its own unique set of challenges but I would say the political and economic consequences there have definitely reverberated across other states,” he told The Daily Beast.

In other words, even if North Carolina clings to HB2 until the end of time, the millions of dollars the state is losing will help deter other states from considering similar legislation. The Tar Heel State would continue acting as the whipping boy for the punishment that other legislatures are choosing to avoid.

That effect can already be traced: South Dakota Governor Dennis Daugaard, for example, pledged to once again veto his state’s recurring “bathroom bill” if it came across his desk, telling a public radio station, “I haven’t heard one instance of a problem in this area. Not one. But we have seen major problems in North Carolina when a bill like this was enacted.”

Republican Kentucky governor Matt Bevin expressed a similar sentiment over the possibility of a “bathroom bill” in his state late last December, telling reporters, “Is there anyone you know in Kentucky who has trouble going to the bathroom? Seriously? I’m cutting red tape, not creating it.”

Governors in these and other states are watching what’s happening with HB2 in North Carolina—and treading more cautiously in the bathroom debate as a result. And even if the economic argument fails to persuade them, Rafter pointed out that they have one final incentive to keep anti-LGBT legislative off the books: re-election.

“I would also point out that Pat McCrory lost his reelection bid because of HB2,” he told The Daily Beast, recalling the narrow defeat of the North Carolina governor who championed the anti-transgender law. “Folks in North Carolina elected Donald Trump president, they re-elected Richard Burr to the Senate, and they broke across party lines to boot Pat McCrory out of office because of the debacle that has been HB2 and what that’s done to the state’s image and the state’s economy.”

Even if anti-LGBT politicians don’t care about their constituents’ jobs, maybe they’ll at least be motivated to keep their own.