Law & Regulation

Business incentives are like lottery tickets, providing big rewards for governments if you don’t count the costs. Iredell County modeled the financial costs and benefits of an incentive offered in 2009 and showed a positive net present value for the incentives, but neglected to factor in the opportunity cost of forgoing the next best use for the funds and the likelihood the investment would have happened without an incentive.

North Carolina policymakers should eliminate provider licensing, certificate-of-need laws, and mandated health insurance benefits. Short of this, the state can accept alternative forms of credentialing and ensure consumers have the right to purchase optional benefits at additional cost. These regulations limit access to health care providers and health insurance by artificially constraining markets.

Watauga County commissioners want voters to approve a $1.9 million sales tax increase to build new recreational facilities. If past is prologue, this new money will not be spent wisely. Watauga County commissioners recently approved the most expensive high school ever built in the state, and they did so without a vote of taxpayers.

The final budget for fiscal year 2011 spends $20.56 billion, $153 million more than the budget for fiscal year 2010. General fund availability in fiscal year 2011 excluding federal funds is $17 million less than was available in fiscal year 2010. A $7 billion shortfall (accounting for federal bailout funds, temporary taxes, pensions and retiree health benefits, etc.) in a $20 billion General Fund requires fundamental reform of state government.

The North Carolina General Assembly is considering a bill (HB 1403) that would require law enforcement agencies to collect DNA samples from individuals arrested for certain felonies. Such a law would overturn the time-honored principle of innocent before proven guilty.

On February 1, 2010, the North Carolina Commission for Public Health published a proposed rule addressing whether pets may be allowed in restaurants. Not unlike the smoking ban, whether pets are allowed in restaurants is a property rights issue.

In 2002 the State of North Carolina passed what was officially titled “Improve Air Quality/Electric Utilities,” which became better known as the Clean Smokestacks Bill (CSB). When the CSB was passed in 2002, it was estimated to cost $2.3 billion.

The excessive regulatory power allowed by North Carolina imposes great costs on its citizens and businesses and hurts the economic competitiveness of the state. This report identifies seven reforms that North Carolina should adopt to improve the regulatory environment in the state.

In 2004, the legislature went too far in passing a complete and permanent ban on gun possession by all ex-felons. In August 2009, the North Carolina Supreme Court in Britt v. North Carolina held that those changes were unconstitutional as applied to the plaintiff, Barney Britt.

In North Carolina, the government can invoke eminent domain and seize private property even if reasonable alternatives exist to using this power. A recent Senate bill (SB 600) would allow conservation easement holders to challenge takings in court by requiring the government to prove that no prudent and feasible alternatives exist to condemnation of properties encumbered by conservation easements.