by Dr. Roy Cordato
Senior Economist, Emeritas
1. For Pat McCrory moving forward=more corporate welfare
In the video clip below (time stamp 6:46-9:14), Governor Pat McCrory tells business leaders at the NC Chamber of Commerce that the way to keep North Carolina "moving forward" economically is to pass the North Carolina Competes legislation — basically an expansion of the JDIG (Job Development Investment Grant) corporate welfare scheme that is set to expire. He also claims that the leaders of both houses of our state’s legislature agree with him. We can only hope that this is not the case.
It should be noted that the word "compete" here has nothing to do with true business competition, where companies go at each other in an attempt to win the hearts, minds, and dollars of customers by providing better and more desirable products. In fact, it has nothing to do with actually making North Carolina businesses more competitive with other businesses at all, either domestically or internationally. It instead refers to the ability of our state government to compete with other state governments in dolling out special privileges and taxpayer money to corporate cronies hand picked by politicians and bureaucrats. This is made very clear in this article from the Winston-Salem Journal describing McCrory’s Commerce Department Secretary and partner on this issue John Skvarla’s views on the NC Competes legislation.
Skvarla said they [economic incentives] are necessary given North Carolina competes regionally, nationally and globally for economic projects. "We immediately compete with 10 southeastern states, some that have Republican governors and Republican General Assemblies and they all have incentives," Skvarla said.
2. John Locke Foundation Releases Alternative Budget for 2015-2017
As the John Locke Foundation does every two years, we have just released our Alternative Budget. Specifically, it should be viewed as an alternative to the budget proposal released by Governor McCrory’s office earlier this year, but it should also serve as a contrast to the House proposed budget being considered this week. While this document was a joint effort among several members of the JLF research staff the lead researcher coordinator of the project was our Director of Fiscal Policy Studies, Sarah Curry.
As Curry noted in the executive summary:
This budget spends less in both years of the biennium than the governor’s, and only increases spending by two- percent from the last fiscal year.
Even in a year when personal and corporate income taxes were cut, state tax revenue has grown significantly faster than budget officials and legislative staffers had predicted. Instead of spending this unanticipated revenue on special interests, this budget focuses on fiscal discipline and funds necessary government operations while saving for unforeseen expenses. Under our proposal, General Fund spending grows by $567 million over the next two fiscal years, to $22.1 billion in FY 2016-17. That’s an annual average growth rate of 1.3 percent, far below inflation and population growth. We also propose adding $620 million to the state’s savings reserve over the biennium and $520 million to the repairs and renovations reserve…
This budget also incorporates additional tax relief for families, in the form of larger per-child tax credits, 529 education savings account deductions, and reinstated deductions for medical expenses, to go along with the cuts in corporate and payroll taxes already scheduled for the next two years. These changes are consistent with our long term tax reform goal of eliminating the tax system’s bias against saving and investment.
3. NC ozone report
The 2015 ozone season began on April 1 and, as I have been doing since this newsletter was started, each week during the ozone season this newsletter will report how many, if any, high ozone days have been experienced throughout the state during the previous week, where they were experienced, and how many have been recorded during the entire season to date. (Note: ground level ozone, which is what we are reporting on, is often called "smog.") According to current EPA standards, a region or county experiences a high ozone day if a monitor in that area registers the amount of ozone in the air as 76 parts per billion (ppb) or greater. The official ozone season will end on October 31. All reported data is preliminary and issued by the North Carolina Division of Air Quality, which is part of the state’s Department of Environment and Natural Resources. Thus far this season there have been no high ozone days recorded on any of the state’s 42 monitors.
The table below shows all of North Carolina’s ozone monitors and the high reading on those monitors for each day of the 7 day period, May 11-17.
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