Research Reports: 2009

North Carolina's system of taxation aggressively interferes with individual liberty and retards economic growth. Policymakers should begin to change the tax system.

Only 14 of the 100 schools that received services from dropout prevention grant recipients had substantially lower dropout rates and higher graduation rates from the 2006-07 to the 2007-08 school year. Of the five types of recipients awarded grants, grants to non-profit organizations appeared to have the most success.

The budget proposal outlined here reduces appropriations in fiscal year (FY) 2009-10 to $18.8 billion, $2.6 billion less than the final budget for FY 2008-09, and similar to the budget for FY 2006-07. In this proposal, per-capita spending adjusted for inflation of $1,969 remains higher than in FY 1997-98 or any year before.

North Carolina may for the first time begin regulating emissions of carbon dioxide (CO2), an invisible, odorless gas prevalent in almost every sector of the economy and also vital to human health. The Environmental Management Commission, a state commission that adopts environmental regulations, is considering regulations that would mandate certain facilities to report their CO2 emissions. These regulations would lay the groundwork for far costlier CO2 regulations.

This report documents the change in locally generated revenues of 98 North Carolina counties* and the 30 largest N.C. cities between 2002 and 2007. Locally generated revenues increased faster than population and inflation in 96 of 98 counties and 24 of 30 cities. In Union County, revenue increased 48 percent faster than population and inflation over five years. For that reason, many counties and cities are having financial difficulties because they have spent taxpayer revenues on unnecessary or low-priority projects.

County and municipal governments provide many key services while taking in billions of dollars in revenue. Their roles grow as state government keeps more local funding sources and shifts more taxing power to localities. Still, finding comparative data is hard. That's why this report provides information about how much local government costs in every city and county in North Carolina.

Even those commission members who would have wanted a proper definition of “meaningful services” had to oppose the weak definition provided to them by the legislative staff. The chair prohibited commission members from amending the definition. The recommendation was so weak that it would have allowed municipalities forcibly to annex areas without providing water and sewer service.

When adjusted for pension contributions, teacher experience, and cost of living, North Carolina’s adjusted average teacher compensation is $59,252, which is $4,086 higher than the U.S. adjusted average compensation and ranks 14th highest in the nation. In a comparison of Southern Regional Education Board (SREB) states, North Carolina’s adjusted teacher compensation is $674 higher than the SREB average adjusted compensation.

Forced annexation is a kind of city-initiated annexation that allows municipalities unilaterally to force citizens living in unincorporated areas into the municipalities. North Carolina has an extreme annexation law even among states classified by recent studies as forced-annexation states.

In June 2008, the U.S. Supreme Court in a case called Davis v. Federal Elections Commission struck down a federal law that punished Congressional candidates for spending too much of their own money on their campaigns. Under that law, once personal spending exceeded a threshold level, the opposing candidate was given fundraising advantages.