Opinion

The Great Debate

North Carolina as the new Wisconsin

By Grover G. Norquist and Patrick Gleason
July 12, 2013

North Carolina, a state traditionally associated with Southern hospitality, college basketball and barbeque, is bucking its genteel reputation this summer as state politics reach fever pitch.

“Nowhere is the battle between liberal and conservative visions of government fiercer,” wrote David Graham of The Atlantic, “than North Carolina.” NBC Political Director Chuck Todd cited Graham’s piece as “a good argument that the best — and most important — political story that no one has probably heard about is taking place in North Carolina.”

Since April, Democrats and liberal groups upset with the state Republicans’ conservative legislation have gathered every Monday at the capitol in Raleigh — with more than 600 demonstrators arrested so far. A state Senate bill passed last week designed to increase health and safety standards at women’s reproductive rights facilities added fuel to the fire. Public protests escalated and the state garnered even more national media attention.

Heated rhetoric aside, however, close examination shows a vocal minority is overreacting to Republicans implementing the fiscal policies they ran on — and that a majority of voters agreed were needed to make the state economically competitive.

Take tax reform, the issue that has been the top item on the docket this year — and drawn the most ire from Democrats. North Carolina has the highest income tax and unemployment rates in the South. This is no coincidence.

North Carolina’s punitive tax rates put the state at a competitive disadvantage in attracting employers and investors. Small businesses, responsible for a majority of job creation, are also held back due to the onerous tax code.

Republican Governor Pat McCrory and legislative Republicans campaigned on cutting the state income tax. The state Senate last week passed a bill to lower and flatten the income tax, and the state House approved similar legislation last month. Lawmakers and budget officials are now developing a compromise bill and McCrory recently announced they are close to a deal.

If Republicans are successful, North Carolina lawmakers will leave for summer break having delivered on one of their top campaign promises.

As North Carolina legislators work to finalize a historic tax reform package and budget, however, outside groups continue to ramp up the Monday protests. Graham, as well as other national commentators on both right and left, have compared them to the Madison, Wisconsin, protest rallies against Republican Governor Scott Walker’s labor reforms in 2011.

North Carolina Republicans should only hope their situation plays out similarly to what transpired in the Badger State.

Since Walker signed these reforms, the state’s unemployment rate has dropped from 7.6 percent to 7 percent — below the national average. Walker has taken the $3.6 billion deficit that his Democratic predecessor left him and turned it into a $419 million surplus — thanks in no small part to the reforms that labor unions, MSNBC and liberal college students decried.

Two years later, it is clear that not only were Walker’s reforms good policy, they were good politics. Walker’s approval rating was at 43 percent by the time he signed the bill. But by May of this year, Walker’s approvals had risen to 51 percent, according to a Marquette University Poll.

Like Walker in Wisconsin, McCrory and the North Carolina state Republicans inherited a budgetary mess from their Democratic predecessors. Rather than raising taxes, and bleeding more revenue from the private sector, as was standard operating procedure under decades of Democratic rule, these Republicans changed course — putting spending in line with revenues. This is what North Carolina voters elected a new Republican majority to do.

Liberal pundits will try to portray what is happening in North Carolina as dysfunction. But it is the opposite. Washington politicians and political commentators bemoan the lack of compromise there. If they want to see what compromise looks like, however, they should watch Raleigh — where Republicans are now compromising on how much tax relief to provide and how best to cut government waste.

Lawmakers on Capitol Hill would be wise to take note.

 

PHOTO (Top): Wisconsin Governor Scott Walker after signing a bill in Madison, Wisconsin March 11, 2011. REUTERS/Darren Hauck

PHOTO (Insert): Governor Pat McCrory of North Carolina

Comments
15 comments so far | RSS Comments RSS

“North Carolina has the highest income tax and unemployment rates in the South.” Mississippi’s unemployment rate is higher according to the BLS and their tax rates are quite lower than NCs.

“North Carolina’s punitive tax rates put the state at a competitive disadvantage in attracting employers and investors. Small businesses, responsible for a majority of job creation, are also held back due to the onerous tax code.” This is where I stopped reading- any evidence for any of this? I own a small biz in NC, the NC GOP has cut the pay to my employees through their EIC changes and it looks like they are going to raise my taxes through their reform.

The idea that low tax rates naturally leads to more investment sounds good but data doesn’t bear it out: http://www.usnews.com/opinion/blogs/econ omic-intelligence/2012/05/03/do-lower-ta xes-create-jobs-lets-look-at-the-states

Posted by NCphil | Report as abusive
 

About the unemployment #s: Politifact rates Walker’s claims as “mostly false”: http://www.politifact.com/wisconsin/stat ements/2013/jun/16/scott-walker/scott-wa lker-says-success-office-reflected-2-poi nt/

Posted by NCphil | Report as abusive
 

An excellent article that summarizes what’s taking place in Raleigh right now. The author is correct: “close examination shows a vocal minority is overreacting to Republicans implementing the fiscal policies they ran on — and that a majority of voters agreed were needed to make the state economically competitive.”

Elections have consequences and in our case in North Carolina good work is being accomplished. More work, however, is still to be done.

Posted by Andy1956 | Report as abusive
 

What the article neglects to mention is exactly who is stopping the Republicans from passing a budget and introducing tax reform. Republicans are. The GOP may have a super majority, but it is a dysfunctional majority.
The NC GOP can’t agree among themselves. There is still no agreement on what the state saving tax reform will be. McCrory and Tillis have shown little leadership strength. They still want to pander to the moderates, while their party takes a hard line to the right. The party’s focus on pushing through unpopular social legislation, such as abortion restrictions being tacked onto a motorcycle safety law, is taking them away from the business of the people.
But are they serving the people of NC? Or are they serving outside interests such as Americans For Prosperity who have been bankrolling local elections around the country? Why does the social legislation being pushed so hard in NC so closely resemble the legislation being battled in TX and in OH? Where is the focus on job creation promised by the GOP?

Posted by SimpsonLisa | Report as abusive
 

I don’t know what North Carolina the authors of this article have been looking at through their partisan blinders, but I do know this – the GOP that came to power in my state in 2010 on a mantra of “Jobs, Jobs, Jobs,” has done NOTHING to promote job growth here.

Instead, they’ve strived to cut state income taxes for the wealthiest among us, slash unemployment benefits at a time when people here need them most, gut public education in a roundabout way to promote private, religiously-based schools, and strip elderly North Carolinians of access to affordable health care, all the while offering half-assed theories that by cutting state spending, employers are going to bring jobs here.

Unfortunately the wisdom of these half-assed arguments will never be fully known, as the religious fundies among the legislators couldn’t help but scuttle the concept by endeavoring to pass legislation based on their religious views that would make Torquemada himself stand up and applaud: an attempt to permit a state-endorsed religion, virtual elimination of the right of choice, and a ream’s worth of similar legislation – whether passed or not – have ensured that no business worth a damn will come here until these idiots are thrown out.

Posted by NCProud | Report as abusive
 

Three things: 1) The “Moral Monday” protests in Raleigh have far more to do with social issues than fiscal ones. To suggest that the protestors are “overreacting to… fiscal policies” is either intentional misleading or simply uninformed. (Considering the author, I rather think it is both) Sure, some of the protest is focused on the social impact OF some of those fiscal policies, but even more is focused on decidedly non-fiscal things like Voter ID laws, restricting women’s access to healthcare options, the Racial Justice Act being overturned, marriage equality, etc. Very little is focused on purely fiscal issues, far too little to ever be considered an overreaction. — 2) Using the improving economy in Wisconsin from 2010 to now is also very misleading. The entire US economy is better today than in 2010… everybody’s unemployment numbers have improved, everybody’s revenue has increased… so, of course Wisconsin looks better now, but that hardly makes them special and worthy of any more praise than any other state. Ignoring the fact that our over-all US economy is better so you can say Walker has done great things is just another attempt to intentional mislead. — 3) Saying that NC’s policies under Democrats were such that businesses (and by extension, people) wouldn’t want to come here, ignores the simple fact that NC is one of the fastest growing states in the union. (18% growth rate in the last 10 years, about to pass Michigan into 9th place for total population.) The high growth in population is part of the reason our unemployment numbers have stayed higher than others by comparison. — It is easy to support a conclusion if you cherry pick the facts for only those that help your case and ignore all those that inconveniently contradict your pre-determined conclusion.

Posted by BuschMan | Report as abusive
 

“North Carolina’s jobless rate has taken a bigger dip – from 9.7 percent last year to 8.8 percent this year – without the tax changes being proposed by Republicans lawmakers.”
http://obsdailyviews.blogspot.com/2013/0 7/north-carolina-americas-partisan.html# storylink=cpy

Posted by WilliamHollar | Report as abusive
 

NC is in the race to the bottom.

It is professionally and academically documented that lower taxes reduce infrastructure improvements, job training and education, and quality of life that do not attract business or employees.

Posted by Flash1022 | Report as abusive
 

Mr. Gleason has presented a thesis, that North Carolina would be luck to be like Wisconsin, that is both misleading and void of critical historical and analytical information. In support of this thesis he states the following:

Point #1:
Mr. Gleason points to how the unemployment rate in Wisconsin is lower than the national average and he’s right. However, Wisconsin’s unemployment rate has been lower than the national average 82% of the time since 1976. In that time there have been 4 democrat and 4 republican governors. For Mr. Gleason to say that Wisconsin’s unemployment is thanks to Mr. Walker’s leadership is misleading and contradictory to the inherent employment structure of the state.

Point #2:
Mr. Gleason states that thanks to Scott Walker, Wisconsin now has a $419 million dollar surplus and again he is correct. However, the most recent budget submitted by the Wisconsin legislature will turn that surplus into a project $500 million dollar deficit over the next 4 years. This fact is available via multiple analyses, one such being within their own state: http://www.wisconsinbudgetproject.org/20 13-15-budget-overview-how-wisconsin-goes -from-a-solid-surplus-to-a-sizeable-defi cit
Further, the right leaning US Chamber of Commerce rank Wisconsin 44th out of 50 states for overall economic performance and 50th (dead last!)for overall job growth. This means that even Mr. Gleason’s own supporters don’t believe that Wisconsin is the type of success story he purports.

Point #3:
Mr. Gleason states that Mr. Walker’s poll numbers have increased since he signed these changes into law. However, the poll numbers are not linked within the article and could reflect any range of Wisconsin citizens polled. Polls are also based on a person’s feelings at a specific point in time and to say that those poll numbers indicate support for Governor Walker’s economic achievements without providing any background on the poll itself is weak at best.

In conclusion, Mr. Gleason has provided high-level facts without considering the details of what he was saying. He probably didn’t know that Wisconsin’s historical unemployment rate was nearly always better than the US, and he probably hasn’t considered the effects of the budget Wisconsin is pushing forward. Lastly, he probably hates the fact that a right leaning organization like the US Chamber of Commerce would publish rankings that effectively ruin his entire argument.

My point is that Mr. Gleason should consider all facets of his argument before stating that North Carolina would be lucky to be Wisconsin. There is very little to support that, and if Mr. Gleason knew the folks in North Carolina he would understand that they will figure this out and ultimately return the state to its rightful place as a beacon of farsightedness in the South.

Posted by TarHeelExPat | Report as abusive
 

Wisconsinite here.

“Since Walker signed these reforms, the state’s unemployment rate has dropped from 7.6 percent to 7 percent — below the national average.”

This is intentionally misleading.

Wisconsin’s latest unemployment rate, for May 2013, is indeed 7.0% and 0.6% less than the national rate of 7.6% for the same month.

However, when Walker signed Act 10 in March 2011, while Wisconsin’s unemployment rate was 7.6% it was 1.3% less than the national rate of 8.9%. So here are Norquist and Gleason cheering Walker’s destruction of the unemployment rate advantage that he inherited.

“Walker has taken the $3.6 billion deficit that his Democratic predecessor left him and turned it into a $419 million surplus — thanks in no small part to the reforms that labor unions, MSNBC and liberal college students decried.”

This is simply untrue. The $3.6 billion figure is sourced from Walker’s Budget in Brief of 2011 and was based upon satisfying the entirety of all agencies’ wishlists – including $3.9 billion of budget increases they had asked for the previous November. It was no more a real deficit than someone who wishes they had a new car this year has a deficit simply through wishing they could afford it.

The $419 million claimed surplus is for the general fund, but oddly at the very same time general obligation debt rose $550 million in FY12 and preliminary reports show it rose about $750 million in FY13 – more than any other year in Wisconsin’s 165 year history. Thus this is no more a surplus than someone who borrows from a loan shark has a surplus because they find they have more money in their pocket than yesterday.

Either Norquist and Gleason are deliberately presenting a fabrication about Wisconsin’s unemployment and fiscal situations or they are merely incompetent.

Posted by GeoffT | Report as abusive
 

Three things: 1) The “Moral Monday” protests in Raleigh have far more to do with social issues than fiscal ones. To suggest that the protestors are “overreacting to… fiscal policies” is either intentional misleading or simply uninformed. (Considering the author, I rather think it is both) Sure, some of the protest is focused on the social impact OF some of those fiscal policies, but even more is focused on decidedly non-fiscal things like Voter ID laws, restricting women’s access to healthcare options, the Racial Justice Act being overturned, marriage equality, etc. Very little is focused on purely fiscal issues, far too little to ever be considered an overreaction. — 2) Using the improving economy in Wisconsin from 2010 to now is also very misleading. The entire US economy is better today than in 2010… everybody’s unemployment numbers have improved, everybody’s revenue has increased… so, of course Wisconsin looks better now, but that hardly makes them special and worthy of any more praise than any other state. Ignoring the fact that our over-all US economy is better so you can say Walker has done great things is just another attempt to intentional mislead. — 3) Saying that NC’s policies under Democrats were such that businesses (and by extension, people) wouldn’t want to come here, ignores the simple fact that NC is one of the fastest growing states in the union. (18% growth rate in the last 10 years, about to pass Michigan into 9th place for total population.) The high growth in population is part of the reason our unemployment numbers have stayed higher than others by comparison. — It is easy to support a conclusion if you cherry pick the facts for only those that help your case and ignore all those that inconveniently contradict your pre-determined conclusion.

Posted by BuschMan | Report as abusive
 

Meanwhile, the people of Wisconsin are laughing all the way to the bank. Our unions had a monopoly on the health insurance of our teachers. They could charge anything they wanted for the insurance and THEY DID. Once Walker kicked them out, the schools could shop for insurance and overnight our schools went from budget deficits to breakeven or surplus. All the teachers thought they would lose their jobs, but turns out that was wrong and because of the surplus, several added more staff. At the state level, our government is no longer running at a deficit and the rainy day funds required under law have been completely restored. You go North Carolina.

Posted by KathLop | Report as abusive
 

“North Carolina’s punitive tax rates put the state at a competitive disadvantage in attracting employers and investors.”

As others have pointed out, this piece could use some fact checking.

NC is listed as having the #1 lowest state & local tax burden on business.

And NC was ranked the 4th BEST state for business by Forbes in 2012 (under the so called punitive tax rates).

http://www.thrivenc.com/whync/accolades

Posted by JRMamaNC | Report as abusive
 

An intentionally misleading opinion piece. Raleigh’s “Moral Monday” protests have far more to do with social issues than fiscal ones and as such, to suggest that the protestors are “overreacting to… fiscal policies” is off base. Also, the author’s use of Wisconsin’s improved economy since 2010 rates a “well, duh!” as it ignores that the economy of the entire nation has improved since then. Lastly, the author’s point regarding NC’s unemployment numbers being higher than most ignores the high growth of NC’s population, one of the highest growth rates in the nation at 18% since 2000. It’s easy to support a conclusion if you cherry pick the facts for only those that help your case and ignore all those that inconveniently contradict your pre-determined conclusion.

Posted by BuschMan | Report as abusive
 

I don’t read the rantings of lunatics and certainly not those who lure our congressional representatives into violating their oath of office. But I did read the headline. Woe betide North Carolina of it’s right, but then again, when has Norquist et al ever been right?

Posted by Sanity-Monger | Report as abusive
 

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