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Introduction

By Roy Cordato, John Locke Foundation Vice President for Research More »

Budget and Taxation

The State Budget
The state budget is out of control. Gov. Mike Easley and the General Assembly call it “fiscal restraint” to spend the tax surplus when the economy is good and raise taxes when the economy is bad. Until state leaders learn to exercise real fiscal discipline or to impose discipline on themselves through an expenditure limit, the “spend and tax” pattern of budgeting from the past decade will continue. More »

The State Tax Burden
Taxes are the price we pay for government, so a reasonable tax burden is of benefit to the citizens who consume the services they fund. Unfortunately, the price of government in North Carolina has grown dramatically over the past two decades and is no longer reasonable. The annual tax burden is $1.5 billion higher than it was in 1991, as repeated state tax increases far outweighed any tax cuts enacted during the period. More »

State Tax Reform
North Carolina has a high state tax burden by regional standards, and its top marginal tax rates of 8.25 percent for individual income and 6.9 percent for corporate income are among the highest in the United States. Tax cuts in the 1990s did not fully make up for tax increases earlier in the decade. Since 2001 the General Assembly has increased the annual burden by a total of $1.4 billion. More »

State Agency Consolidation
The constitutional offices of North Carolina state government have changed little since the beginning of the century. As a reaction first to the tyranny of royal governors and then to the Civil War, the state has divided executive power among a number of separately elected offices. At the same time, governors and legislators have created many agencies under their direct control. More »

Education

School Standards & Testing
With the implementation of the ABCs of Public Education, the Excellent Schools Act, charter school legislation, and other reforms, North Carolina lawmakers have put education at the top of the priority list. But even after some recent progress, repeated problems with the state testing program and disappointing performance from our high school students suggest that more fundamental changes are needed. More »

School Choice & Competition
Public education is a core function of state and local government. The state constitution, in the words of the N.C. Supreme Court, recognizes the right to a “sound, basic education” for every child in the state. But public education need not and should not be delivered by government monopolies, as a diverse array of magnet, charter, and private schools are demonstrating across the country and here in North Carolina. More »

Education Spending
Will Rogers said, "Lord, the money we do spend on Government and it's not one bit better than the government we got for one-third the money twenty years ago." This is especially true for money that we spend on public education. Despite billion-dollar increases in education spending, it has become clear that more money alone will not yield better results. More »

Child Care and Preschool
One of the most controversial issues in the past few years has been the proper role of the state in providing child-care and preschool opportunities to North Carolina children. More »

Higher Education Policy
North Carolina’s system of public higher education absorbs a substantial part of the state’s budget — in Governor Easley’s 2007 budget recommendations, almost 18 percent goes to higher education. State spending on higher education is usually justified on public-benefit grounds, namely that increased education and training for those who attend colleges and universities actually benefit everyone because the graduates will add so much to the economy and culture. More »

Job Training
For state and local policymakers, the issue of job training requires a significant amount of rethinking. North Carolinians spend a vast amount of money on training, but the benefits are difficult to quantify. In the 2004-05 fiscal year, total expenditures for job training and placement services were about $300 million, spread wastefully and somewhat haphazardly over nine major departments and agencies. Adding state expenditures for community college and university education, North Carolina's total commitment to postsecondary education and training routinely exceeds 10 percent of the state budget. More »

Local Government

Local Budgets & Taxes
Local governments across North Carolina are complaining about increasing demands for public services, proliferating unfunded mandates from the state and federal governments, and insufficient revenue sources to meet their financial obligations. Some of these complaints are more legitimate than others. In recent legislative sessions, local officials have asked for new taxing authority, all the while using their existing control over property taxes and other taxes and fees to impose an ever-higher cost on North Carolina taxpayers. More »

Housing & Urban Development
Homeownership is widely viewed as a necessary first step for community development. Once renters become owners, they begin to take a proprietary interest in their own property and that of the neighborhood. They set down roots. They begin to accumulate assets (most families use homes to a greater degree than bank accounts or mutual funds to save for the future) and, as property taxpayers, participate in local public affairs. More »

Smart Growth
As communities across North Carolina cope with the challenges of rapid growth in population and economic activity — which are, it should be remembered, far less serious than the problems associated with a lack of such growth — some policymakers are embracing the idea of “Smart Growth.” Unfortunately, this new debate about growth controls, zoning, open space, and housing density in North Carolina reflects too little consideration of the details of Smart Growth policies and market-friendly alternatives. More »

Government Regulation

Economic Development
While economic development has dominated the agendas of many governors, legislators, and local elected officials in North Carolina, it is one of the most misunderstood activities that governments undertake. Politicians love to attract attention to themselves through job announcements and ribbon cutting, but those are a poor substitute for less glamorous policies that maintain a balanced, efficient, and fair economic environment. More »

Regulatory Reform
Regulation is the "hidden tax" that governments impose on families and private firms. While state and local governments clearly have an interest in developing sensible regulation, regulations often are developed without examining their costs and their impact on all regulated entities. More »

Property Rights
Property rights have received renewed attention in large part because of the Kelo v. City of New London case. In that case, the United States Supreme Court held that the government can seize private property solely for economic development reasons. In other words, if the government can find a better economic use for private property, it can seize it and transfer the property to a private developer. This opinion has sent shockwaves throughout the country. If anything good came out of Kelo, it was putting eminent domain abuse and other property-rights violations (e.g., forced annexation) on policymakers' radar screens. More »

Transportation Policy
Highways and transportation facilities are some of the most visible programs that state and local governments operate. But they are not without controversy. Some believe that North Carolina has invested too much money in highways and not enough in mass transit.More »

Tort Reform
There is a legitimate need for lawsuits. Citizens should be able to go to court and get fairly compensated for the harm caused by negligent acts of individuals or businesses. However, the civil justice system is being abused. Plaintiffs receive damages beyond what is necessary or appropriate. Individuals and businesses that should never be sued find themselves paying large attorneys' fees to defend against frivolous lawsuits. More »

Air Quality and Climate Change
Despite news media reports, North Carolina's air is clean and getting cleaner. Emissions of all primary air pollutants as defined by the Environmental Protection Agency (EPA) are well within federal standards and have been for over 20 years. More »

Health and Human Services

Health Care Reform
Rapidly rising medical costs are making health care insurance more expensive and less available to individuals. Workers are less likely to find insurance through their employers, and those who receive coverage face higher premiums, copays, and deductibles. Little surprise, then, that health care is a top concern among voters nationally and in North Carolina. More »

Medicaid & Health Choice
State and federal expansions of Medicaid since 1989 have helped make North Carolina's Department of Health and Human Services one of the state's fastest growing institutions. More »

Disability Services
State programs for the physically and mentally disabled have become one of the largest government enterprises in North Carolina, making up nearly one-fifth of the Health and Human Services (HHS) budget and employing thousands of people. Most of these programs rely significantly on federal dollars, though it should be noted that many of those federal dollars originated in North Carolina. Unlike other HHS programs, such as welfare for the able-bodied or Medicaid for middle-class seniors, disability services have long been considered a proper function for government to perform. More »

Other Issues

Privatization & Competition
Like governments in other states and localities, governments in North Carolina are struggling to satisfy two apparently conflicting public demands: lower taxes and better services. Under the traditional model of public sector management, these two goals are diametrically opposed. To lower taxes, a government must reduce the amount or quality of services. To improve programs such as public schools or social services, citizens must be willing to "invest" more tax dollars in government. More »

Crime & Punishment
Preventing crime is the most basic of government functions. But despite some important progress in recent years, North Carolina governments still have much to do to meet this fundamental responsibility. For example, the crime rate was about 12 percent higher in 2004 than it was in 1985 and remains far higher than the rates of the 1950s and 1960s. In high-crime areas of the state, the goals of education reform or economic development will be difficult to achieve without making more progress in improving safety. More »

Civil Rights & Equal Opportunity
Civil rights and discrimination are among the most controversial subjects that state and local leaders must discuss. But they are also crucial issues that involve the core values of our political system: equality before the law, personal freedom, and the dignity of the individual. Affirmative action, originally proposed as a device for extending educational and employment opportunities to minorities and women previously excluded from fair and open competition, has in all too many cases become discrimination itself. Likewise, unconstitutional policies by public universities to outlaw intolerant speech on grounds of race, gender, etc. run serious risks of discriminating against viewpoints. The resulting disaffection and anger threatens to pull our society apart at the seams. More »

Campaign Finance Reform
While the issue of campaign finance reform barely registers in public opinion polls, many politicians and the media tell us reform is critical to the future of democracy in America. It is clear, however, that they believe that is true only insofar as we accept the version of reform demanded by these same politicians and the media — public financing, contribution and expenditure limits, extensive regulation and even prohibitions on issue advocacy and independent expenditures. More »

Suggested Resources
Suggested reading for those who want to learn more about these important issues. More »

Vital Statistics at a Glance
Twenty Years of Vital Statistics on North Carolina Public Policy. More »

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