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  • Writer's pictureDavid Laurence

Ten Key Reforms of the 2010s Transforming North Carolina

The 2010s produced a remarkable turnaround for North Carolina’s economy and education systems under Republican leadership in the General Assembly, as the state earned three consecutive ‘Best State for Business’ rankings from Forbes and made historic education accomplishments like providing the third-fastest rising teacher pay in the nation according to the National Education Association.

Despite inheriting billions of dollars in debt from Democrats in 2011, successful economic and education reforms passed by the Republican-led North Carolina legislature dramatically grew the private sector with new jobs and wage creation, improved state government for the citizens it serves, and produced a new era of economic growth in a boom decade for our state.

These are ten key reforms of the 2010s benefiting families and businesses in North Carolina:

1. Tax Relief for Families and Businesses Makes North Carolina CNBC’s #1 State Economy, Forbes’ ‘Best State for Business’ 2019

In the 2000s, Democrats raised the sales tax in North Carolina four times – in 2003, 2005, 2007, and 2009. The state was still left with a nearly $2 billion debt by the end of last decade. By contrast, Republicans in the 2010s have levied a lower sales tax and dramatically reduced tax rates for families and businesses while raising the zero-tax bracket to save low-income working people the highest percentage of their earnings.

By 2019, 1.5 million working North Carolinians were exempt from state income tax – mostly low-income earners amounting to nearly 30% of all returns – after a higher zero-tax bracket was consistently approved by the Republican-led General Assembly. The zero-tax bracket, or ‘standard deduction,’ was raised again by the legislature in 2019 and has more than tripled for married families in North Carolina under Republican leadership.

The successful economic results of personal income and corporate tax relief are driving the state’s powerful job and population growth, with top-tier national rankings reflecting North Carolina’s economic resurgence this decade.

The state was named CNBC’s Best State Economy in 2019, has finished top-two in Site Selection Magazine’s Business Climate rankings each of the last 5 five years, boasts unanimous AAA credit ratings, and was named the Best State for Business by Forbes three years in a row.

Today, more people are working in North Carolina than at any time in the state’s history with the lowest taxes in recent memory.

2. Major Pay Raises for Teachers, State Employees, and Law Enforcement Officers Approved Since 2014

North Carolina leaped 18 states in national teacher pay rankings since 2014 as the General Assembly approved a salary increase for educators each of the last six years. Data from the left-leaning National Education Association shows North Carolina had the third fastest rising teacher pay in the nation from 2014 to 2018.

Most state employees received salary increases each of the last five years, with the 2018 increase called “a plan that will make North Carolina a leader in terms of living wages for public employees” by the President of the State Employees Association of North Carolina (SEANC).

SEANC also supports the 2019 budget vetoed by Gov. Cooper, saying in June that “our members spoke out in record numbers during this process” and “we ask that all legislators do the same by voting yes on the budget compromise.

Significant salary increases for State Highway Patrol troopers, State Bureau of Investigation agents, Alcohol Law Enforcement (ALE) officials, and correctional officers have also been a focus of recent General Assembly budgets.

3. New Transportation Formula and Funding

Prior to Republican control of the General Assembly in the 2010s, road funding in North Carolina was allocated much differently than it is today for decades by Democrats. Projects were generally selected directly by interested lawmakers during the budget process prior to Republican control, leading to a political system of road funding.

But in 2013 the Strategic Transportation Investments (STI) program was put in place by Republicans to take politics out of mobility funding and replace it with an algorithmic formula. STI helps the state prioritize taxpayer dollars where we need them most.

Governor Cooper’s transportation secretary recently praised the Republican reforms, saying “transportation decision-making became data-driven and transparent for the first time in our state’s history and proved to be a national model.” He also noted “we are experiencing more growth than new York, New Jersey, Ohio, Illinois, and Michigan combined.”

The state is not only benefitting from critical road infrastructure reforms – North Carolina’s ports, airports, and rail are doing exceptionally well following landmark investments from the state legislature. Wilmington’s port was recently named the fastest growing in the nation, setting records for container traffic following tens-of-millions of dollars in taxpayer investments in new cranes, larger turnaround basins, and improved capability.

The North Carolina legislature has also extended innovative Build N.C. Bonds to proactively finance new road construction to support the state’s rapid population growth, and had available funds to provide hundreds of millions of dollars in additional direct appropriations to DOT this November after overspending left the department with a cash flow shortfall.

4. Justice Reinvestment: Raised the Juvenile Age, Funded the Sexual Assault Kit Backlog and Streamlined Agencies

One of the first major reforms by the North Carolina General Assembly in the 2010s was the consolidation of three law enforcement agencies into one Department of Public Safety. The Justice Reinvestment Act provided immediate administrative and financial reform to one of state government’s largest sectors, improving law enforcement both for the brave officers serving in the line of duty and the citizens they protect.

The legislature also committed significant financial resources to key reforms like Raising the Age of Juvenile Justice, a long-term accomplishment of the Republican-led General Assembly that is currently being implemented. Additional funding to relinquish the sexual assault kit backlog and support other critical law enforcement services were also successfully prioritized by the legislature in the 2010s.

5. Better Budgeting by the State Legislature Leads to Record Emergency Savings Reserve and Massive Revenue Surpluses that Support Over $1 Billion in State Hurricane Aid Since 2016

North Carolina is one of only a few states with unanimous AAA credit ratings in 2019 after Republicans improved a deeply flawed state budget process that drove the state into debt and revenue deficits under Democratic leadership last decade.

As a result, North Carolina collected a nearly $900 million surplus and built a record savings reserve that peaked at $1.9 billion this decade, providing immense emergency relief to victims of three major hurricanes and other natural disasters since 2016. The state General Assembly further instituted a new budget requirement to refer some revenue surpluses to the savings reserve.

The state General Assembly has appropriated more than $1 billion to hurricane relief the last three years without raising taxes while maintaining a sizable reserve for future uncertainties. By contrast, the state had little savings, large debt and deficits under Democrat control last decade and Gov. Cooper opposed the state’s large rainy day fund in 2016, saying the emergency relief funds should be immediately invested instead of reserved.

Other critical policy adjustments that improved North Carolina’s budget process, helped repay Democratic debt, and reverse deficits into surpluses, include a landmark unemployment insurance reform passed in 2013, and more recent implementation of the Unfunded Liability Solvency Reserve and creation of the State Capital Infrastructure Fund to prioritize major construction projects.

6. Regulatory Reforms Create Jobs, Drive Investment, Protect Environment and Attract Growth in Urban and Rural Counties

Burdensome, bureaucratic red tape has been reduced across North Carolina by the Republican-led General Assembly this decade, producing an economic turnaround drawing cutting-edge technology industries to the state while bringing manufacturing back to create jobs in the counties where we need them most. The free-market reforms range from major energy regulatory transformations to allowing outdoor grills at restaurants.

The North Carolina legislature passed a comprehensive regulatory reform measure nearly every session this decade. Once again, Gov. Cooper’s vetoes are threatening reform and its successful results of a boom decade of business and job growth in North Carolina recognized in top-tier national economic rankings from CNBC and Forbes.

Manufacturing is on a comeback across rural North Carolina counties, not only in new cutting-edge industries but also from flagship offerings of our state like furniture, as recognized by the Wall Street Journal this month. New rural broadband initiatives passed by the General Assembly are also successfully connecting underserved communities with innovative grant programs.

Environmental regulatory reforms added further protections to the state’s natural resources, addressing emerging issues like coal ash and PFAS contaminants with cutting-edge responses. North Carolina’s Coal Ash Management Act passed this decade was the first of its kind in the United States, while the North Carolina Policy Collaboratory was recently formed with a substantial appropriation “focused on how scientists and policymakers can work together to reduce potential harm from the (PFAS) substances.”

7. A New Era for Education: Capital Construction Funding, School Choice, Lower Class Sizes, School Safety Priorities, Improved Testing, Broadband in Every Classroom, and Much, Much More.

The 2010s were truly a transformational decade for education systems in North Carolina that put the priorities of families first with critical reforms like lower tuition, safer learning environments, school choice, better testing, and lower class sizes.

North Carolina had not approved a statewide education bond since 2000 until the 2016 ConnectNC bond approved by the Republican-led General Assembly injected $2 billion into higher education capital projects for universities and community colleges across the state. Today, many of those campus projects are nearing completion.

The General Assembly’s 2019 state budget provided another $1.9 billion capital infrastructure fund for universities, community colleges, and school systems in every county. Unfortunately the legislature’s 2019 education capital fund was vetoed by the Governor in the state budget and legislative Democrats refuse to override his veto, stalling these funds indefinitely.

Other landmark education reforms in North Carolina this decade include a historic expansion of school choice for families, a lower class size mandate, tens of millions of dollars in new funding for school safety, reduced testing and state-funded AP exam fees, and becoming the first state to offer a broadband internet connection in every K-12 classroom.

By 2018-19, North Carolina’s total K-12 education budget was nearly $2 billion larger than in 2011-2012, as Republicans increased public school spending year-after-year by an average of 3.3% over the last decade.

8. Smarter Healthcare Policy: Medicaid Transformation and Non-Expansion, Association Health Plans, Innovative Policy

At the end of last decade’s Democratic control, North Carolina’s Medicaid system was an unmitigated bureaucratic disaster. The program faced massive cost overruns that drew hundreds of millions of dollars in state funds from other critical public sectors like education and public safety.

Patients needed cost-effective healthcare that was customer-focused, while taxpayers needed relief from increasingly burdensome costs of the entitlement.

A solvent and streamlined Medicaid program is critical to the sustainability of our public programs and protecting taxpayers. By declining to expand Medicaid and instead closing its budget gaps and improving its efficiency with better managed care reforms, the General Assembly saved constituents hundreds of millions more in unexpected liabilities and cost overruns like those New York is facing right now.

The source of Medicaid’s expensive and unpredictable cost overages was a fee-for-service reimbursement system that rewarded the volume, not quality, of healthcare performed by providers. Transformation of behavioral health services in Medicaid have successfully reduced cost overruns for taxpayers in North Carolina.

The legislature’s healthcare reforms include expanded services for eligible Medicaid populations, more in-home services for the elderly and disabled, and the transformation of behavioral health services for Medicaid. The 2019 budget also included an additional 1,000 waivers for North Carolinians with intellectual and developmental disabilities, but those critical services for families remain blocked by the Governor’s budget veto.

North Carolina was moving all Medicaid services to managed care to improve outcomes, until Gov. Cooper’s Health and Human Services Secretary halted this landmark Medicaid transformation – half a decade in the making – unexpectedly in 2019.

The General Assembly will maintain its commitment to taking taxpayers off the hook for unpredictable, expensive Medicaid costs and replacing the failed system with a streamlined approach to providing poor families a helping hand.

The state legislature also approved a landmark healthcare reform in 2019, allowing the small businesses as well as the large employers to offer association health plans through the Small Business Healthcare Act.

9. Major Election Reforms Add Voter ID and Early Voting Hours, Strengthen Absentee Ballot Rules to Improve Democratic Process

The North Carolina General Assembly kept a steadfast commitment to implementing a voter ID law this decade, and statewide voters approved a ballot referendum in 2018 to add the commonsense election integrity measure to the state constitution.

Though activist judges continue to obstruct voter ID in North Carolina, 34 states already have voter ID and the requirement polls with broad bipartisan support across the country.

By 2018, North Carolina Republicans also nearly doubled the number of early voting hours compared to those offered by a Democrat-led General Assembly in 2010. Republicans also tripled Sunday voting hours and increased weekend voting hours by 66% over that period. Evening hours of early voting were also up 235%.

Following revelations of absentee ballot irregularities in the 9th Congressional District, the North Carolina General Assembly also took significant steps to strengthen laws against fraud in the absentee process.

10. Other Critical Reforms Driving North Carolina’s Successful Turnaround Under Republican Leadership this Decade After Inheriting Debt, Deficits, High Taxes from Democrats in 2011.

The 2010s marked a historic decade of reform for North Carolina as new legislative leadership built a state government that truly serves its citizens, and not the other way around.

While embarking on a new era for our economy and education systems, the state’s traditional bedrock industries also thrived. The legislature’s success drove record tourism, a shrinking achievement gap in graduation rates, and a record low infant mortality rate. The General Assembly defended family farms, prioritized the military and veterans’ families, and worked to protect brave first responders and law enforcement officers from harm.

An increase of obstruction in Raleigh is eroding these shared priorities for North Carolina families as a Democratic Governor and legislators block pay raises and capital projects for school systems, halt Medicaid transformation, and work to overspend taxpayer dollars. The Governor’s opposition to a strong savings reserve threatens our financial security, while his hypocritical opposition to tax relief endangers the state’s economic success.

Fortunately, Governor Cooper’s constant vetoes seeking a return to higher taxes, overspending, and entitlement expansion, have failed to stifle the state’s powerful comeback under Republican leadership in the 2010s.

North Carolina is poised for a uniquely prosperous future if it maintains successful pro-growth policies passed by Republican leadership over the last decade.

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