Upcoming policy discussions in the General Assembly and ongoing upheaval in North Carolina politics resulting from the State’s ongoing economic and demographic transformation reflected the focus of comments from a diverse group of Raleigh policy experts during the Rocky Mount Area Chamber of Commerce’s Spring Legislative Forum, held April 17th.
The morning event featured presentations by Joe Stewart of the North Carolina FreeEnterprise Foundation, Alex Sirota of the North Carolina Justice Center’s Budget & Tax Center, Chris Fitzsimon of the North Carolina Justice Center’s NC Policy Watch, and Becki Gray of the John Locke Foundation. While their presentations and subsequent audience questions did include some discussion of economic challenges for Rocky Mount and Eastern North Carolina, most of their content focused on issues and trends applicable to the state as a whole.
Leading off, Joe Stewart highlighted the “fundamental shift” taking place with respect to North Carolina’s electoral map, influenced by continued, concentrated growth in urban areas along the Charlotte-to-Raleigh corridor (“Charleigh”), voter anger and disgruntlement with current incumbent office holders, mobilization in response to negative opinion regarding the Affordable Care Act, and traditional poor results for the party of the incumbent Present during the mid-term election of their second term. Stewart anticipates the general election results staying close to current political party distribution, though several incumbents may suffer defeat in their primaries against strong opposition and voter dissatisfaction.
Alex Sirota followed up with an overview of current state budget and economic conditions, emphasizing the challenges many parts of North Carolina are facing with “too few jobs, and too few consumers.”
Sirota’s presentation included mention how North Carolina’s state budget as a percentage of the overall state economy is at its lowest level in 40 years, reflecting decreased investments for infrastructure, schools and programs focused on economic accessibility. She does not anticipate policymakers doing much in the coming legislative session, as leadership blames the impact of Medicaid entitlement spending for limiting budget options.
Sirota disagreed, arguing Medicaid expenditures have shown lower rates of growth than other state programs. While recent legislative forecast of state revenues shows overall growth slightly above budgeted projections, Sirota express concern about the impact of tax reform plans adopted in prior sessions, including last year’s significant reforms which will reduce revenues from the state income tax by approximately $655 million per year.
Similarly, Chris Fitzsimon emphasized how limits in available state revenues impacted funding for education. The veteran journalist started off retelling a story provided by Mooresville School Superintendent Mark Edwards, who encountered one of his teachers working an evening shift at Food Lion as a janitor in order to earn extra pay and cover family living expenses.
Fitzsimon did note Governor Pat McCrory’s proposal for increasing starting teacher pay as a positive step, but expressed deep concern regarding the lack of pay increases for veteran teachers, as well as limited funding for student textbooks and additional essential programs, including the state’s Pre-K initiative.
Fitzsimon also mentioned approximately 20,000 families in North Carolina are on the waiting list for childcare subsidies, a program he argued is critical to helping parents move off other entitlements and successfully reenter the workforce.
In closing, Fitzsimon concluded that the current “list of priorities” comprising the state budget is backwards and requires significant consideration in the coming session.
Becki Gray closed the presentations with some counterpoints to Fitzsimon’s claims, providing a summary of actions taken by Governor McCrory and the General Assembly to achieve economic growth and job growth through restructured and reduced taxation, as well as addressing business concerns with the costs and impact of regulation.
Gray noted the reduction of sales taxes in 2011, as well as personal and corporate income tax rate reductions taking effect earlier this year. In defense of regulatory reform, she mentioned how several entrepreneurs informed her how they did not believe they could start their current businesses in today’s environment of rules and bureaucracy.
Gray also discussed the importance of effective investments in infrastructure, emphasizing the strategy of moving away from past focus on patronage and toward greater consideration of actual need. On education, she discussed current reforms centered on standards and accountability, while noting how teacher pay has been identified by the General Assembly as their top issue for the upcoming short session.
Gray concluded that while economic response to reform takes time, early indications show improvement with respect to new job creation and growth across multiple sectors of the state economy. She does not believe we are “out of words,” though she feels we are “moving in the right direction.”
Subsequent discussion following the presentations focused on current job growth, especially confusion over statistics and conflicts in reporting. Panelists agreed on the challenges dealing with confusion. Joe Stewart used the opportunity to discuss observations of how economic evolution and the impact of globalization are having significant impacts on workforce expectations.
Stewart noted the potential for growth of Charlotte’s Douglas International Airport, which will likely become the State’s third major port following construction of additional runways and a multimodal rail cargo distribution facility. Stewart also mentioned how North Carolina is home to the largest concentration of German-owned businesses in the United States, as well as how companies like Siemens, with funding assistance from the German Government, are working to train employees for their North Carolina plant, as well as trying to deal with the challenges of a multi-cultural workplace.
When asked about the importance of local infrastructure investment, all panelists agreed that local governments would help themselves to make strategic investments in local roads, bridges. They also acknowledge challenges facing the state with respect to transportation funding and growing demand for transit in densely-populated urban areas.