Policy Report

North Carolina faces significant fiscal and economic challenges over the next two years. But it need not resort to higher taxes, a state-run lottery, higher debt, or gimmickry to balance its budget. Nor does North Carolina need to skimp on crucial needs such as education and highways. By setting firm priorities within state government, eliminating unnecessary or duplicative programs, and charging users of some services a reasonable price, state leaders can generate sufficient savings to invest in the future needs of the state.

Ground-level ozone, often referred to as smog, is front and center on the policy agenda of environmental groups and legislators at all levels of government. Over the past several years, high-profile studies published by the American Lung Association, the Public Interest Research Group (PIRG) and the Clean Air Network (a consortium of environmental advocacy groups) have claimed that ozone is having a severe impact on public health, both nationwide and in North Carolina. These reports have gotten a great deal of media attention but very little media scrutiny.

This fifth annual report on schools from the North Carolina Education Alliance shows that many school districts in the state made progress in 2001-02. It also shows that many of the failing school systems from 2000-01 were still performing in the failing range again last year. Official results of statewide testing are reported annually in the Department of Public Instruction’s ABCs of Public Education. End-of-grade tests for elementary students and end-of-course tests for high school students are the only exams administered statewide each year. As such, information about public schools is focused on the results of these exams. Grading Our Schools offers a different lens for studying test results and other performance data. As an additional information tool, we hope it will allow parents and taxpayers to better evaluate student performance in North Carolina’s public schools.

All middle school teachers in North Carolina have to teach physical science, which is required for middle school students in NC public schools. Unfortunately, over 80% have never taken a physical science course and many of those who have, have taken a course that is of no help to their students. Naturally, with their limited backgrounds, they hare heavily dependent on the materials they are given to teach from. In addition, in many instances these materials form the teacher’s own introduction to the subjects. It is especially important, therefore, that the textbooks and other materials that teachers and students are forced to use get it right.

The National Board for Professional Teaching Standards (NBPTS) is a private organization formed in 1987 with the goal of establishing standards for teaching effectiveness and certifying those teachers it identified as especially capable. NBPTS has written standards that purport to show what accomplished teachers “should know and be able to do” and has established a certification procedure that relies on videotapes, portfolios and written essays. There are currently more than 16,000 National Board certified teachers in the United States, more than 20% of them in North Carolina.

By the Numbers 2003: What Government Costs in North Carolina Cities and Counties is the fourth in a series of studies that examine local taxes, fees, and charges in every North Carolina communities. Charlotte ranks first among major cities in combined local government costs per person, with Hickory, Durham, Wilmington, and Cary rounding up the top tier. Among large urban counties, Durham and Mecklenburg have relatively high costs as a percentage of personal income.

Former Indianapolis Mayor Stephen Goldsmith said that one of the greatest challenges facing local government is how to do more with less. This is certainly true for local governments in North Carolina. In the past two years, they have had to adjust to significantly more stringent budgetary constraints. This was brought on, in large part, by Governor Easley’s decision to withhold state reimbursements to counties and municipalities. Because of this localities are being forced to find innovative ways to balance their budgets.

North Carolina’s state budget reflects its governmental priorities. Unfortunately, over the past two decades governors and lawmakers have usually chosen to add new programs to the state budget without considering the merits of existing programs and finding ways to fund higher-priority items by eliminating lower priorities. As a result, the budget has grown by leaps and bounds, interrupted only briefly by retrenchment during recessionary periods, including the past three fiscal years. Until state leaders learn to exercise fiscal discipline or to write fiscal discipline into law via a strong expenditure limit the budget problem will worsen.

With news of a worsening state budget and a weakened state economy, Locke Foundation analysts have updated last year's alternative budget with new projected savings and tax changes for FY 2002-03. The resulting Changing Course V budget would eliminate the deficit, repeal last year's hikes in sales and income taxes, stimulate the economy through additional tax relief and highway investment, and protect highpriority items such as public safety and classroom teachers.

A 2002 survey of North Carolina’s most politically active business executives found that they did not necessarily agree with the current direction of public policy in the state. Business leaders from every region answered questions about fiscal policy, education, transportation, tax rates, regulation, and ways to improve economic competitiveness. They disagreed strongly with legislative decisions to raise taxes.