Research Reports: Policy Report

Commissioners of debt-ridden Cabarrus County want taxpayers to bail them out by approving a quarter-cent sales tax increase on May 17. If the voters do not approve the tax increase, commissioners threaten to hit them with a 2.2-cent property tax increase.

The John Locke Foundation asked The Beacon Hill Institute at Suffolk University (BHI) to use its North Carolina State Tax Analysis Modeling Program (NC-STAMP®) to analyze three state tax proposals. The tax changes would provide a powerful stimulus to the North Carolina economy. Employment would increase by 14,922 in 2012, and when fully implemented in 2013 would create 17,016 by leaving more money in the hands of the state’s households and businesses. The combination of individual income tax and sales tax changes would increase real disposable income by $1.1 billion in 2012 and $1.6 billion in 2013. (Revised May 10, 2011)

Medicaid is a national problem, not just a state problem. All states are faced with the same incentive to grow their Medicaid programs because of the federal match. Unsustainable Medicaid spending is exacerbating the debt crisis at the federal level. It is paramount that state policymakers put pressure on Washington to reform Medicaid and willingly trade the open-ended federal reimbursement of state spending for freedom from federal roadblocks to make common-sense reforms to their programs.

A high-speed rail proposal for North Carolina would create substantial risks for taxpayers, while doing little to nothing to reduce traffic, help the environment, cut energy use, or create jobs. North Carolina should return the federal high-speed rail grant funding, withdraw its pending application, and seek no more funding for passenger rail.

North Carolina’s auto insurance system is unfair to low-risk drivers because it overcharges them in order to subsidize some of the state’s more risky and dangerous drivers. Every insured driver pays a hidden tax, and private insurance companies are guaranteed a profit. This report recommends reforms to improve the system.

County and municipal governments provide many key services while taking in billions of dollars in revenue, but finding comparative data is hard. That's why this report provides information of how much local government costs in every city and county in North Carolina.

This report highlights eleven action items that North Carolina’s new General Assembly should seek to implement in the first 100 days of the 2011 legislative session. These items touch upon a cross section of public policy areas, including education, economic development, property rights, energy and the environment, health care, the budget, and transparency. We at the John Locke Foundation believe that these items represent straightforward actions that would greatly enhance the liberty and prosperity of North Carolina’s citizens.

Montgomery county commissioners have raised the property tax by nine cents over the last two years, from 58 cents to 67 cents per $100 valuation — a 15.5 percent increase. Now the commissioners want $225,000 tax increase (an amount about the same as another one-cent increase in the property tax). If voters approve this tax increase, the total tax increase over the last three years would be $2.1 million.

Alleghany County commissioners are asking county voters to approve a $160,000 tax increase at a time of high unemployment. That amount would be equal to a property tax increase of 0.9 cents per hundred dollars of value. County operating budget appropriations for fiscal year 2011 are $570,274 higher than in fiscal year 2009 – an amount 3.5 times as much as what the tax would generate.

Clay County commissioners are asking county voters to approve a $200,000 tax increase at a time of high unemployment. That amount would be equal to a property tax increase of 1.4 cents per hundred dollars of value.