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.
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.
Political observers may welcome the North Carolina House’s uncharacteristic speed in devising its 2003-05 budget plan by its previously announced deadline of Easter weekend, but state taxpayers are unlikely to view its nearly $860 million in extra taxes over the next two fiscal years as timely given the weakness of the state’s economic recovery. By working harder to identify budget savings, lawmakers could have avoided the tax increase without adversely affecting teachers, prisons, or other core services of state government.
The North Carolina General Assembly faces a critical choice about the state’s fiscal direction: whether to extend nearly $500 million in tax increases that politicians had previously promised were “temporary,” or to find additional savings to balance the FY 2003-04 budget. Since the taxes were originally imposed in 2001, North Carolina’s business growth has fallen short of the Southastern average and its tax rates remain among the highest in the region and the nation. And according to the Tax Foundation, North Carolina's state/local tax burden has risen to 25th in the nation in 2003, up from 36th in 1998.
posted January 6, 2003 by Erik Root, Michael Lowrey
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.
Gov. Easley's new incentives proposal would put political appointees into the position of doling out special tax breaks that amount to grants of taxpayer money to private businesses. Because of the unpredictable nature of a free-market economy, such a policy cannot claim to boost overall economic growth. A better policy would be to reduce North Carolina sky-high marginal tax rates on personal income, investment, and capital gains - which are among the highest in the country.
The N.C. Senate is debating its proposed budget, which would reduce authorized FY 2002-03 spending by $585 million. Most of the $1.4 billion budget gap, however, would be closed with one-time revenues, including tax hikes and fund diversions, that will reportedly create a recurring deficit in FY 2003-04 approaching $800 million. Some leaders propose closing that gap with tax hikes, too, meaning that the total annual tax burden will have grown $1.4 billion from 2001 to 2003.
In recent months, public officials have made a range of statements in an attempt to explain persistent state and local budget woes. Many of these assertions do not square with the facts. A collection of graphs and tables shows clearly that North Carolina government is out of line with neighboring states in spending, employment, and taxes. Moreover, revenue growth outpaced personal income growth during the 1990s, while debt service costs are projected to triple over 10 years.
The Southern Appalachian Mountain Initiative (SAMI) is a consortium of eight Southeastern states, including North Carolina, and several federal agencies. It is now beginning to publish its research, more than a decade in the making, and will likely help to shape the debate on air quality for years. State policymakers should be cautious in interpreting SAMI data and analyses, however, due to troubling signs that it may not be looking at both sides of the regulatory equation.