by Brian Balfour
Senior Vice President of Research, John Locke Foundation
As the House finalizes the votes on their budget plan (see a general overview here), there are a couple provisions receiving little fanfare that should not be included when the conference committee hammers out its final budget proposal:
Establishment of a state government run retirement plan for private sector employees. This idea was first introduced earlier this session in HB 899. The bill would establish a retirement fund to be managed and administered by the state government, to be offered to private sector employees working for companies that don’t offer retirement funds.
The reasoning behind the bill, as laid out in the bill’s language, is that “too many North Carolina citizens have no or inadequate savings for retirement.”
I wrote last month about why the bill is a bad idea, explaining that “Running a retirement fund for private sector employees simply falls outside the proper core functions of state government.” Moreover, with countless options for investing retirement savings at your fingertips, this not only smells like a solution in search of a problem, it would also place state government in competition with the private sector. The reasons for a lack of retirement savings among workers may be several, but a lack of options is not one of them.
Expansion of the film grant program. Film grants are taxpayer-subsidized corporate welfare, primarily benefitting Hollywood production companies. Indeed, economic analysis finds that states offering film grants as incentives get a negative return on such bribes…I mean “investments.”
The House budget plan would make it easier for film production projects to receive a taxpayer handout, while increasing the total maximum amount a company filming a television series can receive.
Recent research found that for every dollar of film grants North Carolina doled out, we only received 22 cents in state revenue.
More importantly, such targeted handouts are grossly unfair by privileging a few politically favored projects at the expense of everyone else. Rather than further politicizing the state’s economy, legislators should focus on leveling the playing field and continuing to improve North Carolina’s welcoming and competitive business climate.