N&O Article Tries to Deny NC’s Economic Growth, Fails Miserably

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In Economic Development
Oct 26th, 2016
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Tuesday’s edition of the Raleigh News & Observer included a fact-free editorial by a staffer of the George Soros-funded Budget & Tax Center – a project of the NC Justice Center.

You likely recall that the Justice Center is the hub of the Blueprint NC movement that notoriously issued a strategic memo directing their members to “Eviscerate the (legislative) leadership and weaken their ability to govern” in 2013.

Tuesday’s article continues this strategy with heavy use of thoughtless sloganeering devoid of any actual facts.

The author’s main point was summed up thus: “Policymakers and business leaders thought that cutting taxes would deliver a stronger economy. Not only has that not happened, they now lament that they don’t have the tools to invest in proven strategies like education and infrastructure.”

This observation is embarrassingly wrong on both counts.

For starters, North Carolina’s economy has gotten stronger since the tax cuts; both in real terms and relative to national  averages.

Research prepared by Brent Lane, Director of the UNC Center for Competitive Economies at UNC-Chapel Hill, and presented to a legislative committee, shows that NC’s economy has outperformed national averages in several measures (see form below).

Beginning in 2014, North Carolina’s per capita income growth rate has exceeded the U.S. average for eleven consecutive quarters, the best such streak in the Tar Heel State since 1996.

Furthermore, North Carolina’s median household income recorded the highest rate of growth in the country over the previous three years – more than doubling the national average. In 2012, NC’s median household income ranked 46th in the country, and in three short years has climbed to 37th. With the continuation of positive economic news for our state, that figure is likely to rise further in 2016.

Third, North Carolina’s overall economy – as measured by state GDP – grew faster than the national economy in each of the last three years.

These strong figures are too broad-based to dismiss. Also consider that North Carolina has created a whopping 441,600 new jobs since January of 2011, a growth rate exceeding 11 percent. The state’s unemployment rate has dropped dramatically from 10.4 percent in January 2011 to 4.6 percent, now below the national average. These facts debunk the article’s false claim that a “persistent lack of jobs is driving high unemployment.”

And the state’s poverty rate has dropped noticeably, falling from 18.6 percent in 2013 to 15.3 percent in 2015, meaning the state’s growth has lifted thousands of North Carolinians out of poverty.

Indeed, the Civitas Institute recently published an in-depth academic study that concluded “North Carolina’s recent, major changes in economic policy have resulted, thus far, in sizable increases in economic growth, employment and salaries, and reductions in unemployment rates.”

Moving on to the concern about having the “tools to invest” in public education and infrastructure, we find still more distortion of the truth. For starters, roads and highways are funded almost exclusively from the gas tax and vehicle registrations – revenue streams not impacted by the income tax cuts being addressed in the Justice Center’s article. Moreover, the article’s author must have forgotten about the $2 billion infrastructure bond passed this spring.

And public education spending has continued to climb since the 2013 tax reforms. State appropriations climbed from $8.01 billion in FY 2012-13 to $8.77 billion in the FY 2016-17 budget, a rise of nearly 10 percent even after adjusting for inflation. (Figures are adjusted to 2016 dollars). Similarly, per student funding has increased more than 5 percent from FY 2012-13 to FY 2015-16, also after adjusting for inflation.

Leaving aside the discussion over whether more money or more family choice delivers better educational results, the facts are clear: state appropriations on public education have grown since the tax cuts of 2013.

First, the left-wing liberals tried to ignore North Carolina’s strong economic growth following its major tax reforms. Now they are trying to deny the facts by merely reciting misleading slogans in order to drown out the facts. They are desperate to keep North Carolinians from knowing the truth: Tax cuts are delivering more jobs and bigger paychecks.

Read full article on NCCIVITAS.com