A Candidate's Guide to Key Issues
in North Carolina Public Policy

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Introduction

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

Budget and Taxation

Spending reform
The top priority for policymakers throughout the state must be to stop spend-and-tax budgeting. They create new programs when the economy is flush; then raise taxes to pay for those programs when the economy slows dries up. North Carolina's constitutional balanced budget requirement forces choices when tax collections fall, but spending also grows as quickly as tax revenues in good years. 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 those taxes fund. Unfortunately, the price of government in North Carolina has grown dramatically over the past two decades and is no longer reasonable. More »

State Tax Reform
Tax reform is important for North Carolina's economic future. Reform proposals offered in the General Assembly, however, would put as much emphasis on raising taxes as on reforming them. That is the wrong approach. Taxes should apply as broadly as possible with as low a rate as possible. More »

Transparency and Accountability
Government needs to be open and accountable to taxpayers. Many of the tools to achieve that goal also help government employees succeed in their jobs. In addition to providing services to the citizenry, governments should also allow citizens to understand how they pay for those services. As budgets have become increasingly complex, citizens are less able to monitor how their taxes are spent. More »

State Agency Consolidation
The constitutional offices of North Carolina state government have changed little since 1900. 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. The result has been a lack of coordination and focus on major functions, wasteful administrative spending, and a lack of accountability to the public. More »

State debt
State spending of current tax dollars is just part of the budget story. Governments also borrow money and take on future obligations they need to fund. This borrowed money can cripple a government, as we have seen in Greece, California, New Jersey, and Illinois. North Carolina has more limits on debt than other states but has still managed to dig a fairly deep hole. More »


Education

School Standards and 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 atop the priority list. But even after some recent progress, repeated problems with the state testing program and disappointing performance from high school students suggest more fundamental changes are needed. More »

School Choice and Competition
In North Carolina, 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. In the end, no system for delivering goods and services functions well without providing a means for consumers to make their desires known and express their level of satisfaction. 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." Such is the case especially for the money we spend on public education. Despite billion-dollar increases, it has become clear that more money alone will not yield better results. More »

Child Care and Early Childhood Education
One of the most controversial issues in the past few years has been the growing role of the state in providing childcare and preschool opportunities to North Carolina children. All too often, proponents of highly centralized early childhood programs and services spend more time tugging heartstrings than recommending sound public policy. More »

Education Lottery
The North Carolina Education Lottery was born of corruption, from its inception as a bill, to its lobbying, to its suspiciously rushed enactment, to its false promise to and exploitation of the state's poorest citizens. From its very beginning, lottery proceeds were predictably used to supplant rather than supplement education funds.More »

Higher Education Policy
North Carolina is proud of its university system, which is often heralded as a model in comparison with other states' systems. Not all of the hype is deserved, however. After all, the comparison is made with other wasteful, inefficient higher education systems. And North Carolina spends more per student than does any of its neighboring states, yet despite the expense it ranks sixth out of ten in the percentage of residents with college degrees. More »

Job Training
For state and local policymakers, the issue of job training requires a significant amount of rethinking. Over the years, economic research in job training has consistently found government training programs to be wasteful, inefficient, and sometimes even counterproductive. In stark contrast, the benefits of private and company-sponsored job training are demonstrably positive and significant. More »


Government Regulation

Economic Development
While economic development has been part of the agenda of most recent administrations, the legislature, 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 promote free markets, entrepreneurship, and overall economic growth. More »

Regulatory Reform
Most state governments, and even the federal government, have far better controls over the regulatory power of government agencies and commissions than does North Carolina. These controls are critical because unelected and unaccountable state officials make major decisions affecting almost every facet of our lives. When there is excessive regulatory power, North Carolina suffers because it imposes great costs on its citizens and businesses and hurts the economic competitiveness of the state. More »

Eminent domain
Eminent domain is the government's power to seize private property. The Fifth Amendment of the United States Constitution states "Nor shall private property be taken for public use, without just compensation." In other words, the government may seize private property for a "public use" if just compensation is provided. For nearly a century, however, the United States Supreme Court has effectively deleted the phrase "public use" from the Fifth Amendment by allowing the taking of property for "public benefits" or "public purposes." These broad terms give the government power to take property for almost any reason.More »

Forced annexation
North Carolina is one of only a handful of forced annexation states. Forced annexation is a type of annexation process that allows municipalities to unilaterally force property owners in unincorporated areas to live within the municipalities without their consent. Forced annexation is just one type of annexation, but it is the focus of annexation reform.More »


Environment

Energy Policy
It has been long-standing policy that energy should be both low-cost and reliable. After all, energy is the lifeblood of our economy. Energy is an input into every good or service. Unfortunately, in 2007, the North Carolina legislature passed legislation, Senate Bill 3 (SB3), that would knowingly drive up electricity prices. The bill mandated that utility companies purchase 7.5 percent of their electricity from renewable energy sources, such as solar and wind power. The extra costs, not surprisingly, are passed on to customers. More »

Climate Change
In recent years environmental policymakers in North Carolina's legislature have focused on reducing emissions of carbon dioxide (CO2) in what is, at best, a misguided attempt to thwart global warming. In 2007 the General Assembly passed Senate Bill 3 (SB3), which requires North Carolina's electric companies to generate 7.5 percent of the electricity that they sell in the state from renewable sources, such as wind and solar energy, and to induce its customers to reduce their energy use by another 5 percent. The measures are referred to as "energy efficiency" although the term efficiency in this case simply means reduction in use. More »

Water and Drought
North Carolina has experienced droughts on a regular basis since 2000. The 2007-08 drought was the most severe. In response, municipal water agencies restricted when and how people could use water, some considered pricing policy changes, and many raised prices after the drought because successful conservation efforts left them with less revenue. More »


Health and Human Services

Health Care Reform
The new federal health care law will exacerbate many of the problems it was meant to address. Some of the most effective health care reforms are changes in state policy, most of which are still available. Such reforms would only mitigate the costs to North Carolinians of federal law instead of resulting in a net reduction of health care costs, but they are still needed. More »

Medicaid and Health Choice
Medicaid in North Carolina desperately needs patient-driven reform. State and federal expansions of Medicaid in the last 20 years have helped make it the fastest growing portion of the state budget. North Carolina already has one of the most expensive Medicaid programs in the Southeast. Needed reforms go beyond cracking down on abuse and implementing a preferred drug list. More »

Mental Health
Mental health reform began in 2001 with a goal of moving from a hospital-based public system to a community- based public system but has had disappointing results. Despite claims to the contrary, privatization is not the problem. The main problem is hubris among reformers who too often have forgotten the first rule of medicine — do no harm. More »


Other Issues

Public transit
Public transit systems in North Carolina have become less about helping citizens move around their communities in the way they desire and more about planners gaining enough political power to impose their transportation preferences and land use fads on those citizens. And it's not just in North Carolina. U.S. Secretary of Transportation Ray LaHood recently admitted that his Livability Initiative is "a way to coerce people out of their cars."More »

Highways and interstates
The "good roads" state is quickly turning into the "traffic congestion" state. While North Carolina ranks third among the 50 states in the amount of money spent per mile of roads, it seems that the money is not spent well. Our rural and urban interstates are poorly maintained and congested. One reason for the deterioration of the state's roads is that the General Assembly has not dedicated all highway-related revenues to highway construction and maintenance. More »

Privatization
Privatization is an umbrella term used to describe several techniques that increase competition in the public sector. The primary difference between the public and private sectors is competition. Private sector entrepreneurs must constantly look over their shoulders because the competition might find a way to cut costs and lower prices, putting them at a competitive disadvantage. The public sector, on the other hand, can be characterized as a monopoly provider. More »

TIF Reform
In 2004, North Carolina voters narrowly approved a constitutional amendment that permits local governments to use a form of public debt called tax increment financing (TIF). The stated purpose of TIF is to promote private economic development in designated districts through the development of public improvement projects. More »

Crime and Punishment
Preventing crime is the most basic function of government. North Carolina governments have made important progress in this area in recent years, but the state has reached an upper bound on imprisonment. The probation system loses far too many offenders, with many returning as violent offenders. A large proportion of inmates have serious mental illnesses, and many of them could have been diverted from incarceration into the community care they need.More »

Taxpayer Financing of Campaigns
North Carolina has a public (i.e., taxpayer) campaign financing system for appellate court judges and for three Council of State positions: Auditor, Commissioner of Insurance, and Superintendent of Public Instruction. Not only does the system lack public support, but also it is almost certainly unconstitutional.
More »

ABC reform
North Carolina's Alcoholic Beverage Control (ABC) system is a relic of the Prohibition era as well as a Gordian knot of political compromises through the decades. A succession of scandals in 2009 and 2010 — exorbitant salaries, nepotism, and lavish parties for ABC board members and staff hosted by liquor representatives — prompted Gov. Beverly Perdue to raise the issue of privatization.
More »


Suggested Resources
The brevity of this briefing book obviously precludes lengthy discussion of many of the important and complicated issues that face state and local policymakers. We recommend that interested North Carolinians visit the following Locke Foundation Policy Reports and Spotlights, and that they contact one of the public policy research organizations in the next section for additional information. More »


About the John Locke Foundation

The John Locke Foundation is a nonprofit, nonpartisan policy institute based in Raleigh. Its mission is to develop and promote solutions to the state's most critical challenges. The Locke Foundation seeks to transform state and local government through the principles of competition, innovation, personal freedom, and personal responsibility in order to strike a better balance between the public sector and private institutions of family, faith, community, and enterprise.

To pursue these goals, the Locke Foundation operates a number of programs and services to provide information and observations to legislators, policymakers, business executives, citizen activists, civic and community leaders, and the news media. These services and programs include the foundation's monthly newspaper, Carolina Journal; its daily news service, CarolinaJournal.com; its weekly e-newsletter, Carolina Journal Weekly Report; its quarterly newsletter, The Locke Letter; and regular events, conferences, and research reports on important topics facing state and local governments.

The Foundation is a 501(c)(3) public charity, tax-exempt education foundation and is funded solely from voluntary contributions from individuals, corporations, and charitable foundations. It was founded in 1990. For more information, visit www.JohnLocke.org.


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