Research Reports: 2003

The North Carolina General Assembly is returning to Raleigh for a special session on economic development. Rather than rush to push targeted tax credits and incentives for a few, lawmakers should pursue a broader examination of the factors under their control that really influence state economic growth. The wrong direction is to enact any set of policies that increase the state bureaucracy or the ranks of lobbyists seeking to arrange special “deals” for their industrial clients.

This study carefully reviews the growth of North Carolina’s 1551 Census tracts during the 1990s compared with the locations of major road improvements. Tract data on changes in population, demographics, prior density, and location are merged with detailed data on 312 major road projects completed during the 1990s, and the relationships between road investments and growth are determined for each of the 12 commuting regions.

The North Carolina Senate held a special session in mid-September to pass a bill reforming the state’s treatment of medical-malpractice issues. A key element of the legislation — instigating expert review of malpractices claims before trial and imposing a related “loser pays” rule to discourage frivolous lawsuits — would be a welcome improvement. But some of the bill’s other provisions, including price controls and subsidized insurance, are much less attractive.

A 2003 report from JLF and the NC Education Alliance looked at the availability and use of parental choice in the state. In 69 of 117 districts, parents had no public-school choice options. Eighty-seven percent of students in grades 3 to 8 attended public schools, with about 15 percent of all 3-8 students were enrolled in a public school of choice (including charters). About 6 percent of 3rd to 8th grade students were home schooled, and another 7 percent attended a private school outside the home.

It‘s been a decade since a contentious merger of three Guilford school districts, and now merger disputes are underway in Orange and Cleveland counties. Unfortunately for merger advocates, the evidence is thin that creating larger school districts improves efficiency or learning. Indeed, some studies suggest that district mergers result in more non-instructional spending and actually hurt student achievement, particularly for those in lower-income communities.

Defining and protecting intellectual property, generally referred to as patents and copyrights, and trademarks have been legal and political endeavors for at least the last several hundred years. In the United States, protections of intellectual property are enshrined in the Constitution. This paper discusses the concept of intellectual property from an economic perspective.

A House-Senate compromise budget for the 2003-05 biennium will cost North Carolina taxpayers another half-billion dollars a year and do little to stem the government’s long-term growth. General Fund spending will actually rise 3 percent in FY 2003-04 and 5 percent in FY 2004-05, with most of the increase over the next two fiscal years concentrated in health and human services, debt service, the UNC system, and subsidies to nonprofits. North Carolina deserves better.

The North Carolina Justice and Community Development Center released a report in May that purported to demonstrate that 60 percent of North Carolina families with children were not receiving enough income to meet a “living-income” standard. This startling statistic was the result of gross exaggerations of cost and undercounts of income, including no accounting for child support payments. Moreover, the Center’s proposed solutions would increase poverty.

State lawmakers are considering a proposed constitutional amendment to allow local governments to issue bonds without a public vote to construct convention centers, sports arenas, and other “economic development” projects. Careful research of these programs in other states reveals that they do not enhance a community’s economic growth over time. Moreover, they weaken governmental accountability to a voting public that does not favor subsidizing private businesses.

Defenders of North Carolina’s fiscal policies over the past two years argue that the state’s massive increases in sales, income, business, and other taxes were just part of a national trend. But the available data put North Carolina near the top in tax increases over the past two years, with more than $1 billion in annual fiscal impact. The state’s quick recourse to higher taxes may be one reason why its economy has been trailing the rest of the region and nation since mid-2001.