Imagine. You get a call from your stock broker. He says he's got a line on a can't-miss opportunity: a startup in a hyper-competitive industry, one in which the costs of doing business (inputs) are going up fast, and the failure rate is as bad as the restaurant industry. They're burning through cash. They're burning through credit. Meanwhile their revenue per transaction is among the lowest in the industry. Do you pull out your checkbook? Or do you hang up and fire your broker?
While it is up for debate whether a full-blown recession will hit North Carolina, early signs of slowing tax revenue have already surfaced. North Carolinians would be wise to remember how our state leaders reacted the last time a recession occurred in 2000-2001, and ask themselves, “Is history about to repeat itself?”
Shortsighted lawmakers, more concerned with funding pork projects and winning the next election, have put healthcare benefits for future state retirees in jeopardy. Consider that since the inception of the current system in 1978, the state has increased spending by more than 720 percent. Yet during the same period, the General Assembly refused to set aside any funds for future state retiree health benefits. The result has been an ever-mounting unfunded liability that now stands at $23.8 billion.
Supporters of poverty fighter John Edwards are still coping with his exit from the presidential race. We can speculate endlessly about his loss – about Obama’s star quality, or Clinton’s experience-by-proxy. But one fact stands out: voters were not swayed by Edwards’ anti-poverty populism. Why? Maybe people know intuitively that there is only so much government can do about the poor.
He hasn't won yet, but should. He should have won before Mohammed Yunus, but certain before Al Gore (who should not have won at all).
North Carolina's political leaders evidently spent $1.2 billion last year planning the state's economy, according to the "Economic Development Inventory" recently released by the General Assembly's Fiscal Research Division. The report outlines the myriad cash awards and legal manipulations used by lawmakers to "stimulate" the economy -- all at taxpayers' expense.
Just as Sarbanes-Oxley was a draconian and overzealous reaction to Enron and Worldcom, so also is Congress gearing up to bailout borrowers and regulate the mortgage industry unnecessarily.
Shame on the Raleigh News & Observer. A headline story on October 30th declared, “South’s schools swell with poor kids” and later stated, “49 percent of the state’s school children live below the poverty line” was irresponsible journalism.
The closest thing in the Carolina mind to manna from heaven is water from the garden hose. People have long thought that since it falls from above, it ought to be cheap and free-flowing. Our fescue needs a drink. We like our cars squeaky clean. Long showers wake us up in the morning. But as soon as a drought hits, we are forced to implement water restrictions, bans and other Soviet-style rationing schemes. Isn't there a better way?
Can state bureaucrats plan and grow the economy better than the market? This question lies at the heart of last week’s special session, which saw the General Assembly approve a new bill that will send tax dollars to existing North Carolina companies meeting specified criteria. The largest recipient of the approved incentive package is expected to be Fayetteville’s Goodyear plant, with as many as five more corporations lining up to receive cash payments.
North Carolinians who are still convinced that targeted incentives like those approved for Goodyear and other corporations are a good idea should start thinking outside the golden begging bowl. I know, I know -- some jobs will be spared by state aid to big tiremakers. But consider what's lost.
As the House and Senate continue their budget negotiations, reports from the General Assembly indicate that House members are proposing a plan that would entail extending the one-fourth cent “temporary” sales tax another two years in exchange for enacting a state-level Earned Income Tax Credit (EITC). Advocates for the state EITC claim it will help offset the high sales tax burden for North Carolina’s working poor. Simple economics, however, suggests otherwise. Our analysis reveals that lowering the sales tax rate would be much better for the working poor than an EITC.
In light of the rapid expansion of long-term state debt and changes in how capital projects are being financed in North Carolina, it is imperative that legislators restore public input on major financing questions. Addressing the state’s increasing reliance on certificates of participation (COPs) is a good place to start.
Both the House and the Senate are currently considering legislation that would overturn the state’s ban on collective bar- gaining for public employee unions. Extending collective bargaining rights to state employees and teachers will cost the state more money, create inflexible labor contracts, and cede decision-making power for setting employment policy from the General Assembly to unions.
The FY2007-09 budget currently being debated by House members includes a proposed 5 percent state Earned Income Tax Credit (EITC) aimed at providing assistance to North Carolina’s “working poor.” An EITC would reduce tax bills or provide cash payments to low-income families who file income taxes. The payments would be based on a sliding scale: as income increases the payments decrease.