State elections aren’t about gridlock

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In Economic Development
Oct 26th, 2016
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After Republicans won their majority in the U.S. House of Representatives in 2010, and particularly after they won the U.S. Senate in 2014, the nation’s capital became a place of active inaction.

There was plenty of furious activity — bills filed and debated, President Obama calling out GOP leaders, Republicans giving as good as they got, political stunts, protests, media narratives, and an endless cycle of invective and recrimination. But few public policies were enacted, other than those the president pursued through executive orders, treaties in all but name, and other means of questionable constitutionality.

While gridlock is to some extent built into the constitutional architecture of the federal government, the mounting frustration with Washington helped give rise to the populist movements of 2016, be they of the Bernie Sanders or Donald Trump varieties. Here in North Carolina, however, the political debate feels entirely different.

Few observers would describe the state capital in Raleigh as a place of inaction. The Republican legislative majorities elected in 2010 have enacted dozens of significant reforms, across a wide range of public policies. Most of them have been either initiated or strongly supported by Gov. Pat McCrory, elected in 2012.

Although some GOP policy changes have been successfully challenged in court — by liberal interest groups choosing their cases and venues carefully — most are still in place or being implemented. These reforms have lowered the tax burden for most North Carolina households, alleviated the regulatory burden on North Carolina businesses large and small, and reshaped the way transportation, education, corrections, and health care dollars are spent.

If your political views place you somewhere right of center, you probably think most of these changes were wise and beneficial, and that they help to explain why North Carolina has experienced relatively strong economic growth and one of the nation’s largest drops in unemployment. If you lean left, you think these changes are radical and unwelcome. Both sides, I suppose, can see the following rankings as confirmation of their positions:

• North Carolina now ranks 11th in the country in business tax climate, according to a Tax Foundation study. Before tax reform, our state was 41st. With regard to specific categories, North Carolina went from 42nd to 15th in income taxes, from 27th to 4th in corporate taxes, and 36th to 19th in sales taxes.

• According to the Cato Institute’s latest “Freedom in the 50 States” study, North Carolina is now 6th in the nation in educational freedom, up from 16th in 2006, thanks to the expansion of charter schools, opportunity scholarships, and other school-choice policies. We also rose to 5th in labor-market freedom, up from 11th, and to 17th in fiscal freedom, up from 27th.

• In the latest edition of its national rankings of state highway performance, the Reason Foundation puts the cost-effectiveness of North Carolina’s highway system at 15th best in the country. As recently as 2005, we ranked an unimpressive 31st. Bipartisan reforms of the way the state allocates its transportation dollars have played a major role in this improvement.

• According to a recent study by the Heartland Institute, North Carolina ranks 9th in the country for its welfare reforms, up from 12th in 2008. The think tank gives the state an especially high score for our requirement that welfare recipients work in exchange for their benefits.

• Expenditure growth by the state and many localities has stayed below the combined rates of inflation and population growth. As a share of the economy, then, the size of North Carolina government has declined — by the 8th-fastest rate in the country — even as high-priority needs have gotten more money. Gov. McCrory and state lawmakers have also made sure to set aside some $2 billion in reserves — prudently, as we have just discovered in the aftermath of Hurricane Matthew.

North Carolina conservatives think of all this as a record of success and want to build on it. North Carolina liberals think it is a catastrophe. That’s what the state elections of 2016 ought to be about.

Read full article on CarolinaJournal.com