Research Reports: Spending & Taxes

State lawmakers are scheduled to meet in Raleigh today to consider a package of tax breaks and other incentives designed to lure a Dell Computers plant to North Carolina. While politicians often portray such deals as necessary to promote growth and job creation, they serve to transfer resources from existing firms, sometimes even competitors, while failing to address tax and other problems afflicting businesses of all sizes in the state. A good place to start in improving the state’s business climate would be to reduce marginal tax rates.

N.C. is currently considering important modifications to its tort law, especially its application to medical malpractice. Proponents say it's the only way to ensure quality medical care remains affordable in N.C. Opponents say fluctuations in interest rates and the "insurance cycle" in general account for premium changes, and that tort reform would imperil the health of North Carolinians by "subsidizing" negligent physicians.

Major road projects are freeway and arterial widenings, new freeways and arterials, new exits, climbing lanes and other major actions that are large enough to likely affect growth. Between 1990 and early 2004, North Carolina constructed 349 major road projects costing about $7.34 billion, about 50 percent of the total expenditures for the TIP and Loop roads and about 1/3 of the total NC State highway program over the same period. This study reviews recent trends in North Carolina’s highway funding practices and the cost-effectiveness of these major capital actions.

From statehouses to corporate boardrooms to community centers, Americans are nearly universally aligned in support of transforming public education. Dismayed by overcrowding, low test scores, and high dropout rates, many people advocate overhauling the educational system in our country. Yet, however unified Americans may be on the need for educational reform, their perspectives diverge greatly on how to achieve it. Recent proposals have ranged from increasing federal funding, to requiring more stringent teacher accreditation, to lengthening school days and terms. Despite more than a decade of discussion, legislative proposals, and counterproposals, many problems remain. Yet, as public debate rages on, a group of concerned parents and educators, advocating freedom and change, is already quietly revolutionizing public education. The persistence of these reformers has resulted in a compelling alternative to traditional public schools — charter schools.

As the North Carolina Senate prepares to vote on its proposed 2004-05 budget plan, it is important to keep in mind that an accounting change included in the plan has the effect of masking the magnitude of the proposed increase.

State legislators are currently considering proposals to issue hundreds of millions of dollars in additional debt without seeking voter approval. The billions of dollars worth of bonds and other debt already approved since 1996 have more than quadrupled the state’s debt service and represent as much as a third of the fiscal impact of the tax hikes passed by the General Assembly since 2001. It’s no wonder politicians are wary of asking voters for more. But that’s why they should.

As the 2004-05 budget process continues, policymakers should use regional and historical benchmarks to identify where to look for savings. Among major budget items, North Carolina spending on K-12 education and law enforcement is at the regional average but its Medicaid and higher-education expenses are higher than in comparable states. Reasonable restraint would save enough money to repeal last year’s tax hikes and catch up on deferred repairs and renovations.

For the first time since 2001, Gov. Mike Easley is proposing a budget plan that does not include new tax increases. However, his 2004-05 plan does contain hundreds of millions of dollars in new spending financed by previous, costly tax hikes on North Carolina families and businesses. A better fiscal choice would be to eliminate low-priority items from the budget and repeal prior sales and income tax increases. The best choice would be to implement JLF’s Freedom Budget plan.

A new survey of North Carolina’s most politically active business executives suggests that they do not agree with the current direction of public policy in the state. A sample of about 300 respondents from every region of North Carolina answered questions about fiscal policy, education, transportation, tax rates, regulation, and ways to improve economic competitiveness. This report provides not only data from the statewide sample but also from six regional subgroups: the Research Triangle, the Piedmont Triad, the Charlotte area, Northeastern North Carolina, Southeastern North Carolina, and Western North Carolina.

More than a decade after the passage of the Americans with Disabilities Act (ADA) in 1990, disability policy in the United States remains fraught with uncertainty, dashed hopes, and contradictions. While most persons living with disabilities today have an unprecedented quality of life — largely the product of medical and technological advancements that would have seemed more the realm of science fiction than science fact a generation or two ago — they are also experiencing some surprisingly negative trends.