The 2009-10 budget marks a continuation of North Carolina’s dysfunctional “spend and tax” cycle: when times are good the state dramatically increases spending. When a recession hits, state leaders resort to tax increases – such as the $1.1 billion tax hike approved this year – to continue state spending.
Lincolnton residents face a staggering state and local government true debt burden equivalent to $9,900 for every man, woman and child – or roughly $39,700 for a family of four.
The October announcement that the Dell plant in Forsyth County would close by January 2010 should serve as a reminder about the folly and arrogance of government-created “economic incentives.”
Do people in Saudi Arabia and Costa Rica really get better medical care than Americans do? Is the federal government truly a model of administrative efficiency? Such statements don't pass the giggle test of most rational people, but they have become mantras for "ObamaCare" backers.
In his comments on the Dell deal gone bad in North Carolina, Bob Orr, executive director of the N.C. Institute for Constitutional Law said, “But this shows the stark and painful folly of the incentives game that state and local governments are playing. No matter how much money you give these large international and national corporations who are headquartered out of state, if it's financially more feasible for them to shut down the operation in North Carolina, they'll do it and never look back."
Policy analyst, Brian Balfour, comments on a News 17 story stating that the federal stimulus money wil hurt North Carolina, not help it. To see the study, click here.
Federal government spending comes with costs; it should not be accepted as the free-lunch it is frequently considered to be. Every dollar the government spends must first be removed from the pocket of the private sector through higher taxes today, or higher borrowing today implying higher taxes tomorrow. A recent study conducted by economic consulting firm Arduin, Laffer & Moore Econometrics shows that North Carolina can expect to lose as many as 67,000 jobs as a result of the federal stimulus package.
NER’s total budget for FY 2009-10 marks a year-over-year decrease of 15% from last year’s actual estimated spending. Buttressed by federal funds of $15 million this year, however, NER’s budget has still climbed 32% in the last five years. And in spite of being in the middle of what we are told is a “budget crisis,” the NER budget allocates over $100 million in questionable items (see below).
At a recent meeting of the Jennette’s Pier Advisory Board, Aquarium Division Director David Griffin offered an update regarding funding for this project. Although our state is currently without a budget, it certainly appears by all accounts that the “Aquarium Satellite Areas Funding” will not face a serious threat of elimination.
If history is any judge, the current tax package soon to be approved by the Governor and General Assembly will harm the state’s ability to recover from the recession and will cost North Carolina jobs in future.
With the economic recession taking a heavy toll on North Carolinians, one thing is on everybody’s mind: jobs. Indeed, when voters were asked what is the biggest issue or problem facing North Carolina today, an overwhelming 54 percent responded with “improving the economy and creating jobs.” The next highest issue (taxes/wasteful spending) garnered only 12 percent.
As the NC House is set to vote today on a bill (SB 575) granting a targeted tax break for one particular large company, a new poll released by the Civitas Institute shows that nearly 9 in 10 voters in North Carolina disagree with this practice. Voters were asked which is the better way to create jobs: give targeted tax breaks and cash incentives to a few large companies or give across-the-board tax cuts to all small and medium sized businesses. Only 7 percent of voters favored tax breaks for large companies as SB 575 would provide. 87 percent of voters favored across-the-board tax cuts for small and medium businesses.
The latest federal bailout is going to a business losing $200 million a month. It employs 275,000 and continues to hire, increase pay and build facilities. They recently decided to add close to a billion dollars in debt on top of $5.5 billion added in the past eight years. They face an estimated $29 billion in unfunded liability to pay health insurance costs for retirees.
Many sections of the Department of Natural and Economic Resources Budget hold the line. In a few areas, however, there is a significant increase and not for the purposes of adding new jobs. Interestingly, there isn’t a whole lot of help going to famers and agriculture, but rather to wildlife and administrative budgets. Overall, NER’s spending in Perdue’s proposal would decrease by 13 percent from actual appropriations in the current fiscal year ($469 million down from $539 million).
Should the state of North Carolina be handing out millions in taxpayer dollars to corporations during a budget crisis? The fiscal year 2008-09 state budget authorizes roughly $142 million in discretionary corporate welfare. The Civitas Institute believes this is an inappropriate use of state funds and the money should be used to help fill the current year budget gap.