Research Reports: 2006

Health care is again a top priority for most Americans. Health savings accounts offer promise and are growing in popularity among companies and individuals. Three states will soon begin consumer-directed Medicaid pilot programs. These are more realistic approaches than proposals by the NC Institute of Medicine and others to expand Medicaid or to force employers to provide health insurance. Individuals, not companies or the state, are best equipped to manage their own health care. Health care reform should start from this premise.

At a public hearing on April 4 the Raleigh city council will receive public input on a proposed across-the-board 72 percent increase in the city’s impact fee schedule (from $682 to $1,172 for single-family homes).1 Unfortunately, the consultant’s report that serves as the basis for an increase is flawed. In fact, Raleigh has collected impact fees for nearly twenty years without ever considering sound economic research. As the word “impact” implies, new housing generates both increased demand for public services and increased tax revenues. Surprisingly, the city council has not demanded that city staff and highly paid consultants produce reports that provide balanced and complete economic analysis. It is not too late; the council should not change the impact fee until proper economic analysis is conducted.

State Treasurer Richard Moore wants to raise the minimum wage in North Carolina to $6.15, “one dollar more” than the federal minimum wage. Moore says the minimum wage hike would help those at the lowest rung of the economic ladder. That’s counter to even basic economics. Studies show that raising the minimum wage makes it even harder for the lowest skilled workers to find employment — but those are the very people it’s supposed to help. Ironically, minimum-wage hikes benefit middle- and upper-income families the most.

New Hanover County’s waste-to-energy incinerator (WASTEC) was built in 1984 to extend the life of the county landfill and also to make money from selling the energy it generated. The incinerator was never able to make money, relying instead on subsidies from the landfill and a higher tipping fee. New technologies and competition have made this costly option obsolete.

Since 2001, Winston-Salem/Forsyth Schools has been building and renovating schools for much less money than other school districts in North Carolina. Their secret? Core principles emphasizing building smaller and more efficient schools, resisting pressure to add or change building features, and holding down costs without compromising quality. Other school districts should adopt these principles, combined with alternative approaches to financing and building schools, to minimize their dependence on large bond issues, maximize state and local revenue, and keep taxes low.

Evidence from throughout the world shows that the planet was relatively warm 1,000 years ago during the Medieval Warm Period and relatively cold 500 years ago during the Little Ice Age. When the 1°C (1.8°F) of global warming of the past 100 years is considered in the context of climate variability of the last 1,000 years, the recent warming looks quite natural and nothing out of the ordinary. In 2001, the United Nations Intergovernmental Panel on Climate Change prominently featured an important graph of northern hemispheric temperatures over the past 1,000 years, and the plot resembled a hockey stick. This same graph was recently highlighted in testimony to the North Carolina Legislative Commission on Climate Change.

As the law is currently written, the education lottery will do little to fund the most critical needs of North Carolina’s students. Too much of the revenue will be used for unproven class-size reduction efforts and pre-kindergarten programs. Too little of the lottery revenue will be given to school districts and charter schools that have critical school facilities needs. The General Assembly can maximize the educational benefit of the lottery revenue by distributing more funds for capital expenditures to high-growth school districts and to charter schools.

State tax revenues grow in strong economies. Politicians use the new revenue to create or expand government programs. In recessions, revenues fall and tax rates rise to pay for the higher level of spending. Spending and taxes in the last ten years illustrate this pattern. As North Carolina enters another period of expanding revenues, Gov. Mike Easley and the General Assembly must avoid the temptation to increase spending so they do not have to increase taxes in the next recession.

North Carolina’s Urban Redevelopment Law is a major threat to private property rights. It is so broad that it would permit the government to seize private property that is not blighted and even to take property for economic-development purposes. Any urban redevelopment law should only permit the government to seize private property if it meets a narrow and common sense definition of blight.

County and municipal governments provide many key services while taking in billions in revenue. Their roles grow ever greater as state government shifts more taxing power to localities to make up for money kept by the state. Still, finding comparative data is hard. That's why this report provides information of how much local government costs in every city and county in NC.