Research Reports: Economic Growth & Development

A new survey of North Carolina’s most politically active business executives suggests that they disagree with the current direction of public policy in the state. A sample of over 600 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 data not only from the statewide sample, but also from six regional subgroups: the Research Triangle (RTP), the Piedmont Triad (WNC), the Charlotte area, Northeastern North Carolina, Southeastern North Carolina, and Western North Carolina.

North Carolina recently filed a lawsuit going after private restraints of trade. But if the state really wants to reduce unfair trade practices and help consumers, it should eliminate or modify its own anti-competitive policies. The certificate of need law, occupational licensing, and other state-imposed restraints of trade hurt consumers and the economic freedom of North Carolinians.

Northeastern North Carolina is trying to reverse its economic misfortune with two large economic development projects that could pull $8.25 million from the General Fund. Proponents want to avoid the legacy of the Global TransPark, but studies used to justify the projects are based on similarly faulty assumptions. A proposed Advanced Vehicle Research Center draws on no existing regional strengths; an entertainment district relies on transforming the region’s tourism. The General Assembly should not fund either project. Members should be sure to read reports on similar proposals–and read them with skepticism.

TEA-211, the federal US transportation program passed in 1998, resulted in a substantial improvement in overall road performance but at considerable cost, according to the 14th annual review of state highways by Professor David T. Hartgen, University of North Carolina at Charlotte.

North Carolina has the second-largest state-owned road system in the US, almost 79,000 miles. A study in 2000 for the John Locke Foundation using data from 1998 showed that the system was in quite poor shape on key indicators. Clearly, North Carolina is losing the battle on road conditions. The purpose of this analysis is to update the earlier study by gathering and reporting on road conditions for each county and determining how conditions in each county have changed since 1998.

The North Carolina General Assembly is returning to Raleigh for a special session on economic development. Rather than rush to push targeted tax credits and incentives for a few, lawmakers should pursue a broader examination of the factors under their control that really influence state economic growth. The wrong direction is to enact any set of policies that increase the state bureaucracy or the ranks of lobbyists seeking to arrange special “deals” for their industrial clients.

Defining and protecting intellectual property, generally referred to as patents and copyrights, and trademarks have been legal and political endeavors for at least the last several hundred years. In the United States, protections of intellectual property are enshrined in the Constitution. This paper discusses the concept of intellectual property from an economic perspective.

The North Carolina Justice and Community Development Center released a report in May that purported to demonstrate that 60 percent of North Carolina families with children were not receiving enough income to meet a “living-income” standard. This startling statistic was the result of gross exaggerations of cost and undercounts of income, including no accounting for child support payments. Moreover, the Center’s proposed solutions would increase poverty.

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.

Gov. Mike Easley's proposed budget for FY 2002-03 includes $250 million in revenue from a state-run lottery that has yet to be enacted. Among many legitimate objections to the administration's idea are that expected net revenue is inflated by between 37 percent and 62 percent - creating a hole in the budget of as much as $96 million — and that the administrative costs of the lottery tax exceed both the cost of alternative taxes and any revenue "loss" to out-of-state lotteries.