• Research Report

    State Made Its Fiscal Bed: Escalating Budgets Imperiled Finances Before Floyd

    posted December 27, 2001 by John Hood
    Responding to Gov. Jim Hunt's call for $830 million in emergency hurricane relief, state lawmakers have nearly drained the state's rainy day fund. Calls for state tax hikes or a new borrowing binge have only been put off until the 2000 legislative session. But state leaders have no one to blame for the coming budget crisis but themselves. As national data reveal, North Carolina has hiked spending far more rapidly than the average state with little regard for the long-term impact.
  • Research Report

    Is NC Really Undertaxed? Release of Progress Board Report Spreads Myths

    posted December 19, 2001 by John Hood
    A report released last week by the North Carolina Progress Board contained hundreds of long-term goals for the state. But the text was overshadowed by the comments of board member and UNC-W Chancellor James Leutze, who said the report showed North Carolina would never make it to the top tier of states without tax increases. Leutze's remarks were ill-timed and ill-informed but reflect the conventional wisdom about taxes and social progress. It’s wrong.
  • Research Report

    Don’t Tap Rainy Day Fund: State Package Overstates Proper State Relief Role

    posted December 13, 2001 by Don Carrington
    State lawmakers are being asked to tap the rainy day fund to finance hurricane relief. They should look more closely at the details of the administration proposal. It provides large windfalls to businesses, farmers, homeowners, and others far beyond what is needed to alleviate immediate suffering and repair public infrastructure. A relief plan reflecting better priorities could be financed with budget savings, so the rainy day fund could be used to repay $240 million in illegal taxes.
  • Research Report

    N.C. Budget Behemoth: General Fund Grows At Nearly Twice The U.S. Rate

    posted December 6, 2001 by Don Carrington, John Hood
    North Carolina's 1998-99 state budget grew by between 10 percent and 11 percent (depending on the measurement used) compared with the national average for state budget growth of only 5.4 percent. This follows a similar pattern last year. Growth in spending on Medicaid and education fueled North Carolina's exceptional budget increase. Overall, North Carolina spends more of its budget on education and correction, and less on Medicaid, than the average state. This mostly reflects differences in responsibilities given to local government.
  • Research Report

    Measuring Up: How North Carolina’s Faculty Salaries Compare

    posted November 30, 2001 by Jon Sanders, John Hood
    Author Jon Sanders studies professor salaries across the United States and finds that the pay of North Carolina's college and university professors, when adjusted for cost of living, is comparable to the pay of faculty in other states. (Not available online.)
  • Research Report

    No Floyd Fiscal Crisis: True State Needs Can Be Met By Rainy-Day Fund

    posted November 21, 2001 by Don Carrington
    As leaders of the N.C. General Assembly discuss the possibility of a special session in December, preliminary indications are that appropriate state spending for hurricane relief will be far lower than expected. The Hunt administration's emergency request for $1.8 billion from Congress was inflated and its assumptions unrealistic. For government infrastructure and aid to those without other access to relief, total cost will not exceed state funds already available for next year.
  • Research Report

    Winning Issues: Exit Poll, JLF Poll Found Conservative Viewpoint

    posted November 12, 2001 by John Hood
    North Carolina's dramatic election on November 7 selected a slate of federal, state, and local leaders, but slim margins and a focus on personalities and name recognition gave few winners a clear mandate on issues. Polls taken before and after the vote consistently found an electorate that was fiscally conservative and favorable to increased consumer choice in such areas as health care, education, and Social Security. Policymakers should seek consensus on these critical issues.
  • Research Report

    End Swiss Cheese Tax Code: New Research Suggests Different Growth Agenda

    posted November 8, 2001 by John Hood
    Three new studies should give North Carolina policymakers pause about the state's current economic development policy. A Kenan Institute survey of international firms throws cold water on the notion that selective tax breaks for big business are an effective means of creating jobs. Along with two other reports, it suggests a different growth agenda: improve core public services such as roads and schools, tackle electricity restructuring, and reduce and reform taxes for everyone.
  • Research Report

    Final Budget Grows 11%: 1998 Is A Year Of Spending Growth, Not Tax Cuts

    posted October 28, 2001 by John Hood
    The lengthy budget negotiations between House and Senate this year resulted in a compromise that gave the Senate its spending priorities this year and the House its tax cuts in future years. Overall, when accounted for correctly, the state General Fund budget will top $13.1 billion in FY 1998-99, representing an 11 percent increase from last year. Spending growth outweighs tax cuts in FY 1998-99 by a ratio of 25 to 1 — but the picture improves somewhat in the out years, when House-sought cuts in sales and inheritance taxes are phased in.
  • Research Report

    Smart Start Fails Test: Studies Show Little Benefit, Make Case for Reform

    posted October 6, 2001 by John Hood
    A new six-county study of Smart Start shows little benefit for most children once they reach school. Coupled with the results of three other studies released since early 1998, these findings make the case for significant reform in the state's approach to early childhood policy. Smart Start should be reformed to 1) provide direct assistance to disadvantaged preschoolers and 2) give North Carolina families more resources with which to improve their children's readiness for school.

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