By JONATHAN M. KATZ and ERIK ECKHOLM
APRIL 5, 2016
DURHAM, N.C. — The divide between social conservatives and diversity-minded corporations widened Tuesday with developments in Mississippi and North Carolina related to the rights of gay, lesbian bisexual and transgender people in both states.
Mississippi’s governor signed far-reaching legislation allowing individuals and institutions with religious objections to deny services to gay couples, and the online-payment company PayPal announced it was canceling a $3.6 million investment in North Carolina.
The measure signed by Gov. Phil Bryant of Mississippi allows churches, religious charities and privately held businesses to decline services to people if doing so would violate their religious beliefs on marriage and gender. Gov. Nathan Deal of Georgia, under pressure from business interests, two weeks ago vetoed a similar bill passed by the State Legislature.
PayPal said it had dropped plans to put in global operations center in Charlotte, N.C., because of the state’s recent passage of a law banning anti-discrimination protections based on sexual orientation and requiring transgender people in government buildings and public schools to use bathrooms that match the gender on their birth certificates. PayPal had pledged to bring 400 jobs and invest $3.6 million in the area by the end of 2017.
The developments in Republican-controlled states reflected growing fissures between business interests and social conservatives, whose alliance has played a central role in the Republican coalition. Similar disputes have erupted in Indiana, Arkansas and other Republican-controlled states since the Supreme Court legalized same-sex marriage last year.
Gov. Pat McCrory of North Carolina and Mr. Bryant join a list of Republican governors who are being squeezed between the business groups that have formed the core of their support and conservative state lawmakers pushing back against recent gains made by advocates of gay rights and same-sex marriage.
The divide played out with particular force a year ago in Indiana after a national outcry over its adoption of what was billed as a religious liberty bill. After an uproar that included questions about whether Indianapolis should host the men’s Final Four tournament, Indiana weakened the law somewhat. But that dispute and a continuing fight over whether the state should adopt anti-discrimination protections may have cost Indiana a dozen conferences and $60 million, a state visitors bureau estimated.
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The dispute was also a wake-up call, said Mark Fisher, the vice president of Indy Chamber, an Indianapolis business coalition. “We had opposed the law, but we didn’t imagine the extent of the outcry,” he said.
In Mississippi, objections have been raised by companies such as Tyson Foods, MGM Resorts International, Nissan and Toyota, all of which are major employers in the state.
But the biggest backlash has come in North Carolina, a deeply divided state with conservative, Republican-dominated rural areas and suburbs vying for influence with tech-savvy, Democratic-leaning urban centers like Charlotte and the Research Triangle area of Durham, Raleigh and Chapel Hill.
With its announcement, PayPal became the first major company to announce it was pulling out of an existing project, saying that “becoming an employer in North Carolina, where members of our teams will not have equal rights under the law, is simply untenable.”
PayPal’s president and chief executive, Dan Schulman, said that if the state repealed the law, “we will reconsider our decision.”
Protesters against the new Mississippi law gathered outside of the governor’s mansion in Jackson on Monday. Credit Rogelio V. Solis/Associated Press
“But obviously there’s a time frame,” he added. “We are now in the process of talking to a number of other states.”
PayPal had already joined more than 120 other business leaders in signing a letter to Mr. McCrory objecting to the law.
Some, like Google Ventures’ chief executive, Bill Maris, pledged not to make any new investments in the state until the law was repealed. Other signatories included Apple, Facebook and Charlotte-based Bank of America, the largest corporation in North Carolina. Mayors and governors of other states, including New York, Vermont and Washington, have banned most state-sponsored travel there.
Asked about PayPal’s decision at a news conference on Tuesday, Mr. McCrory said, “I respect disagreement.”
Opponents of the North Carolina law said Mr. McCrory’s hand had been forced by more conservative elements of his party.
“He’s a moderate at heart, but he got rolled on this,” said State Senator Jeff Jackson, a Democrat who represents Charlotte. “The Republicans in the General Assembly have enough votes to override all of his vetoes. His concern in vetoing this is that he would be overridden and his legislative agenda would be punished for even trying to stand firm on this issue.”
Mr. McCrory also faces a tough re-election fight this fall against the state attorney general, Roy Cooper, who has said that he would not defend the law.
Some of Mr. McCrory’s longtime allies are differing with him on the law. Duke Energy, the state’s largest power company — for which the governor worked, mostly in human relations, for 29 years, including while he was mayor of Charlotte — has come out strongly against it.
The law’s leading proponents, Speaker Tim Moore of the House and the Senate Republican leader, Phil Berger, issued a fiery news release on Tuesday laying blame for PayPal’s pullout at the feet of Charlotte officials, whose anti-discrimination ordinance covering L.G.B.T. people had prompted the statewide action.
The legislative leaders, who have framed the issue as an argument over whether access to bathrooms should be governed by gender identity or gender assignment at birth, accused Charlotte’s mayor, Jennifer Roberts, of teaming “up with a convicted child sexual predator to pass a radical bathroom policy allowing men to use girls’ locker rooms and bathrooms.” This was a reference to an L.G.B.T. advocate who resigned months ago as leader of a local gay-rights group because of controversy surrounding a 2000 conviction for committing a “lewd act” with a 15-year-old boy while he was a youth minister in South Carolina, when he was 20.
“If Jennifer Roberts, Roy Cooper and the far-left political correctness mob she’s unleashed really care about the economic future of her city, they’ll stop the misinformation campaign immediately and start telling the truth about this common-sense bathroom safety law before more damage is done,” the Republican legislators concluded.
Ms. Roberts responded, “I urge the state to take responsibility for its harmful actions and to listen to its business constituency and quickly find a legislative remedy” before more jobs are lost.
Other companies reconsidering their business in North Carolina include Lionsgate, which is filming the musical “Dirty Dancing” in the state but said in a recent statement that it would be “hard pressed to continue our relationship with North Carolina if this regressive law remains on the books.” Braeburn Pharmaceuticals, which had announced plans for a $20 million expansion in Durham, said it was “re-evaluating our options based on the recent, unjust legislation.”
The irony is that the areas hit hardest by the backlash are cities with progressive mayors, including Charlotte. “I think that was part of the political calculation behind this bill: that if North Carolina suffers as a result it will be the parts of the state that don’t support the current Republican majority,” said Mr. Jackson, the state senator.
Jonathan M. Katz reported from Durham, and Erik Eckholm from New York.