While Washington remains mired in dysfunction, conservative leaders across the country continue to score impressive victories for taxpayers, students, employers and job-seekers at the state level. Perhaps no state has done so more effectively in recent years than North Carolina, and the Tar Heel State’s future is looking even brighter after the Republican-controlled state legislature overrode Democrat Governor Roy Cooper’s veto of the state budget last week.
The new budget cuts taxes, controls spending, expands school choice, increases teacher performance bonuses, reduces corporate welfare, and more – demonstrating yet again the power of free-market policy to create opportunity and prosperity when lawmakers commit themselves to these principles.
Entering 2017, individual and corporate income tax rates fell automatically, and the state was on track total $6 billion in tax cuts by 2020 since 2013. But after gaining legislative super-majorities in the November 2016 elections, conservative leaders were not content to rest on their laurels, despite the challenge of a newly-elected Democrat governor who sought to raise taxes and spending.
Instead, lawmakers refused to back down from the promises they had made to voters. The enacted budget will increase spending by just 3 percent – that’s slightly less than 3.8 percent combined growth of population plus inflation, and far less than the 5.1 percent increase Governor Cooper wanted. It cuts taxes by an additional $3.6 billion starting in 2019, by further reducing the individual and corporate income tax burden, cutting the franchise tax, and repealing the mill machinery tax.
By overriding the Governor’s veto, legislators also made great strides to improve the quality of education in North Carolina. Most importantly, they created just the sixth Education Savings Account (ESA) program in the country. The new fund will allow families with eligible disabled children to use a portion of the education dollars set aside for that child on any qualified educational expense, rather than being sent straight to the district school the child is zoned to.
Moreover, the budget expands the existing Opportunity Scholarship program to allow more students a chance to attend the school that’s right for them. And finally, the budget includes roughly $25 million to expand a performance-based bonus program to better reward some of the best teachers in the state.
All of these reforms were made possible because of the economic boom resulting from the last three years of tax cuts, which increased tax revenue and created massive surpluses.
From 2013 through 2016, North Carolina cut taxes by a remarkable $4.7 billion. The left warned of budget deficits and underfunded services, but instead the state saw massive economic growth, job growth, and even tax revenue growth.
From 2013 through 2015, North Carolina had the fastest-growing economy in the country. The state added roughly 300,000 jobs from 2013 through 2016, and finished both fiscal years ending in June 2015 and June 2016 with significant revenue surpluses from the economic boom.
In turn, the revenue surpluses allowed the state to put more money toward K-12 education, teacher pay raises, school choice programs, disaster relief, the rainy-day fund, and other priorities, and the 2017 budget builds on that progress.
In addition to controlling spending, cutting taxes, and improving education, the budget cuts corporate welfare handouts by millions of dollars, improves government transparency, and even reforms the criminal justice system.
While liberal legislatures like the ones in Illinois, New Jersey, and Connecticut are mired in deficits and shutdown scenarios, bold conservative leadership is creating unprecedented growth and prosperity in North Carolina.
The national media has conveniently chosen to ignore the North Carolina success story, but the American people have not, as thousands continue to move to the Tar Heel State and bring their dollars with them.
Rather than fall for the Left’s misleading rhetoric, lawmakers across the country and in Washington, DC should look to North Carolina to see how bold conservative leadership and energized grassroots activists can score massive wins that increase well-being for all.