Civitas Institute

Jobs

Brian Balfour — Mon, 08 Feb 2010 16:47:26 -0500

The first two recommendations in the Civitas Institute 2010 Agenda: “20 Changes for 2010: A Primer for State Reform” focus on policies that will promote job creation.

The Problem: High Unemployment and Slow Job Growth

In Dec. 2009, unemployment in North Carolina hit a 30-year high of 11.2 percent, which ranked 7th highest in the nation. The high placement in unemployment rankings reflects a decade-long trend. Annual unemployment rates here have been above the national average every year since 2000. Conversely, North Carolina’s unemployment rate exceeded the national average only once within the 25 years prior to 2000.

Similarly, North Carolina’s job growth has lagged behind regional job growth rates this decade. From January 2000 to December 2009, North Carolina expanded jobs at a rate of 2 percent, well below neighboring Virginia’s 10.5 percent, Florida’s 7.8 percent and Georgia’s 5.6 percent. Moreover, North Carolina job growth was less than half that of the South Atlantic region¹ rate of 4.8 percent.

North Carolina’s ability to create jobs has been hampered by several failed policies. Tax rates that are highest in the region and among the highest in the nation create a disincentive for entrepreneurs to relocate or expand in North Carolina. In a misguided attempt to offset high state tax rates, lawmakers have opted for a steady stream of targeted tax breaks and corporate welfare handouts to a select group of politically-connected companies. Such a practice creates an uneven playing field and establishes unfair competitive advantages for the privileged firms.

The mix of high overall state tax rates combined with political favoritism in the marketplace is a failed recipe for job creation.

Solutions:
1). Ease tax burden on small businesses
An overwhelming 85 percent of voters said they would approve of a 10 percent tax cut to every small business. Moreover, 60 percent of voters said small businesses are better able to create jobs, compared to only 9 percent who replied “government” is better able to create jobs.

Small businesses create the majority of new jobs in North Carolina and across the nation.
- Businesses of less than 20 employees, in fact, account for roughly 60 percent of new job growth in North Carolina.
North Carolina has one of the highest small business tax rates in the nation.
- Most small businesses are organized as “pass-throughs” such as S-corps, partnerships and LLC’s. Pass-through businesses file under the personal income tax rate, prompting many economists to label the top marginal income tax rate the “small business tax.”
- North Carolina’s small business tax rate is highest in the South Atlantic and is 12th highest nationally.

Recommendation:

North Carolina should create a special top marginal tax rate on pass-through businesses of 5 percentin order to be regionally competitive.
The new rate would encourage more small business creation and growth, providing a major jumpstart to new job creation.

2) Stop corporate welfare and level the playing field for all businesses
Voters were asked “In order to create jobs, is it better to 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 companies? An overwhelming 87 percent replied “across-the-board tax cuts,” compared to only 7 percent who said “targeted tax breaks.”

According to the General Assembly Fiscal Research Division “Economic Development Inventory” study, North Carolina extended roughly $1 billion in targeted tax breaks in 2007-08, along with tens of millions more in direct handouts to politically-favored corporations.
This practice is unfair and punishes small businesses that can’t afford lobbyists to broker sweetheart deals with government.
North Carolina’s corporate tax rate is among the highest in the southeastern U.S.²
- Sen. Dan Clodfelter (D – Mecklenburg) noted in a November 2009 Senate Finance Committee meeting; “the existing tax system in North Carolina undercuts our competitive position and acts as a deterrent to new business investment and especially to the creation of new jobs.”
A 2008 Organization for Economic Co-operation and Development (OECD) study examined the impact of various taxes on economic growth, and concluded that “Corporate taxes are found to be most harmful for growth.”

Recommendation:

Reduce the corporate tax rate to 2 percent and eliminate all targeted tax breaks and corporate welfare handout programs such as the Job Development Investment Grant program (JDIG) and the One North Carolina Fund.

A 2007 bill (SB 1112) proposed this very measure. Estimates at the time claimed the change would be "revenue neutral."

The drop in corporate tax revenue would be offset by elimination of the more than $1 billion in targeted tax breaks and handouts.

¹According to the Bureau of Labor Statistics regional definitions, South Atlantic region here refers to the states: Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, and West Virginia
http://www.bls.gov/news.release/laus.t01.htm

² Here the southeastern part of the U.S. includes: North Carolina, South Carolina, Virginia, Tennessee, Georgia, Mississippi, Louisiana, Kentucky, Arkansas, Alabama, West Virginia and Florida. Among these states, North Carolina's corporate tax rate is third only to Louisiana and West Virginia.

Civitas Poll: Voters Want Tort Reform

Chris Hayes — Thu, 04 Feb 2010 15:37:04 -0500

Raleigh, N.C. – As the debate over how to reform the health care system continues in Washington, voters in North Carolina overwhelming support one specific proposal that has been talked about for years. A new poll released today by the Civitas Institute reveals voters overwhelming support reforming medical malpractice laws to limit damages.

In the live caller poll of 600 likely voters, 65 percent of voters support placing caps on the amount of money that can be awarded in medical malpractice suits. Only 28 percent were opposed. Seven percent were unsure.

“Voters recognize that out of control medical malpractice rates are driving up costs and chasing doctors from their profession,” said Civitas Institute executive director Francis De Luca. “If those looking to reform health care want a widely supported issue that will see an immediate impact in reducing costs and increasing access, then tort reform should be at the forefront of those discussions.”

Capping medical malpractice damages is universally supported across political parties with 58 percent of Democrats, 67 percent of Republicans and 75 percent of unaffiliated voters in favor. Additionally, of those voters who say health care is the most important issue facing our state, 64 percent of them support tort reform.

“North Carolina adopting tort reform is a common sense, good first step to lead us down the path to fix our health care system that is overwhelmingly supported by the voters of North Carolina,” added De Luca.

The Civitas Poll is the only monthly live-caller poll of critical issues facing North Carolina. For more polling information on Civitas polling see www.nccivitas.org/media/poll-results/.

Full text of questions:

Do you support or oppose legislation being passed to place caps on the amount of money that can be awarded in medical malpractice suits?

Support – 65%
Oppose – 28%
Not Sure – 7%

Click here for full results and crosstabs.

This poll of 600 likely general election voters in North Carolina was conducted Jan. 19-21 by Tel Opinion Research of Arlington, Virginia. All respondents were part of a fully representative sample of registered voters in North Carolina. For purposes of this study, voters we interviewed had to have voted in either the 2004, 2006 or 2008 general elections or were newly registered voters since 2008.

The confidence interval associated with a sample of this size is such that: 95 percent of the time, results from 600 interviews (registered voters) will be within +-4% of the “True Values.” True Values refer to the results obtained if it were possible to interview every person in North Carolina who had voted in either the 2004, 2006 or 2008 general elections or were newly registered voters since 2008.

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Francis DeLuca talks about the recent poll on whether or not people want another round of stimulus on Bill Lumaye

Tue, 02 Feb 2010 16:44:59 -0500

Francis DeLuca talks about the recent poll on whether or not people want another round of stimulus on Bill Lumaye

MP3 File [Play]
[Play]

Chris Hayes on Robby Kendall - 01/27/10

Tue, 02 Feb 2010 16:35:51 -0500

Raleigh, Wake County Taxpayers Denied Vote on New Debt, Will Pay Millions More

Brian Balfour — Tue, 02 Feb 2010 15:22:25 -0500

In spite of an already alarming level of debt, Raleigh and Wake County council members continue to max out the taxpayers’ credit card without even asking first for permission.

In December, Wake County government completed the sale of $160 million worth of Limited Obligation Bonds (LOBs) to finance a new Justice Center. This action came on the heels of $163 million of LOBs issued by Wake County to fund the expansion of the Hammond Road detention center.

Similarly, the Raleigh city council is currently finalizing plans to issue nearly $450 million in new debt to finance its new Public Safety Center along with a number of public “remote operations” facilities. Their chosen method of financing is Certificates of Participation (COPs).

Several issues surrounding these projects present cause for concern for area taxpayers – the ones who will be forced to foot the bill for these debt-financed projects.

Taxpayers, Voters Not Allowed to Decide
The debt instruments chosen by Wake County (LOBs) and the City of Raleigh (COPs) are not subject to voter approval, as General Obligation (GO) bonds are. It is simply unfair that local politicians have once again decided to deny voters and taxpayers of any say regarding the very debt they will be forced to pay back. Would we allow someone to run up debt on our credit card without asking permission, and then expect us to pay the bill? Why are our government officials allowed to do the same?

Raleigh city officials, in particular, are defending their decision to deny voters a say claiming that time is of the essence, and the city should act now to take advantage of low interest rates and construction costs. As Raleigh Mayor Charles Meeker said, "Delaying construction of the public safety center for 10 months could cost Raleigh citizens as much as $50 million. That is a gamble I'd prefer not to take."

The fact is, contrary to Meeker’s claims, Raleigh’s plans for the new projects have been solidified for quite some time. Indeed, an internal memo dating back to May of 2009 shows plans for the new city buildings already well under way, complete with debt model projections. There would have been plenty of time to get the bond referendum on the ballot last fall if city leaders were interested in the opinion of taxpayers.

Unapproved Debt Will Cost Taxpayers Millions More
Because General Obligation bonds are approved by voters and backed by the local government’s taxing authority, they are considered slightly less risky than LOBs or COPs – which are backed by the assets (land, buildings) being financed.

Being considered less risky, GO bonds typically carry a lower interest rate than LOBs or COPs in the bond market. Therefore, the decision by Raleigh and Wake County to use LOB and COP debt will cost area taxpayers millions more in interest payments.

According to estimates obtained from government officials, using LOBs will cost Wake County taxpayers $11 million more than voter-approved GO bonds would have. Similarly, the city of Raleigh’s decision to use COPs will cost taxpayers an estimated $6.3 million more than if GO bonds were to be used.

Raleigh, Wake Debt Already Highest in the State, and Growing
At a staggering $7 billion, the City of Raleigh already has the highest level of real debt (principle plus interest, as of June 30, 2009) of any local government entity in the state of North Carolina. Adding the $3.5 billion in debt held by Wake County brings the combined city/county debt total to $10.5 billion. By comparison, the combined city/county debt total of Charlotte/Mecklenburg comes to $8.9 billion.

On a per capita basis, Raleigh’s real debt burden equals $18,600 per city resident, almost three times as high as Charlotte’s $6,400. Wake County’s per capita real debt is $4,023 per person, a bit lower than Mecklenburg County’s $5,200 debt burden per person.

Local government debt in Raleigh and Wake County has been escalating rapidly. Debt service in Raleigh’s city budget recently more than tripled in just five years (2004-2009). Payments on debt in the 2009 city budget consumed about 18% of total budget expenditures, up from 10.3% in 2004. That means basically one in five dollars spent in the city budget is already going toward paying down debt.

Similarly, debt service in Wake County climbed by 65% in the last five years.

Such high debt loads should cause Raleigh and Wake County taxpayers to ask why our governments choose to finance such massive projects through the continued use of debt financing instead of pay-as-you-go budgeting. Moreover, taxpayers should insist that any new debt be approved by voters – the ones actually picking up the tab.

Civitas Poll: Obama Favorable Up, But Republicans Lead Generic Ballot

Chris Hayes — Tue, 02 Feb 2010 14:42:57 -0500

Raleigh, N.C. – President Barack Obama’s favorable rating with North Carolina voters improved in January, but voters prefer Republicans to Democrats in Congress according to a new poll released by the Civitas Institute.

According to the live caller poll of 600 likely voters, President Obama was seen favorably by 52 percent of voters. 37 percent had an unfavorable opinion. 10 percent had no opinion. The +15 point spread between favorable and unfavorable is up five points over his ratings in December.

However, when asked generically if they preferred a Republican or Democratic candidate for Congress, voters supported Republicans by a 41-39 margin.

“Voters are separating their personal opinion of the President from their opinion of his policies,” said Civitas Institute Executive Director Francis De Luca. “While North Carolinians continue to see the President in a favorable light, his policies and in turn, Democrats in Congress, are unpopular with voters.”

This split is evident among unaffiliated voters who have a 51-37 favorable rating for Obama, yet prefer Republicans for Congress by a 41-31 margin.

“Nothing better exemplifies the split between personality and policy than seeing personally popular Obama sitting courtside, giving color commentary on TV while watching Duke lose to Georgetown on Sunday, then on Monday pursuing his unpopular liberal agenda by announcing the largest budget deficit in history along with tax increases for most Americans,” added De Luca. “Basically, voters like Obama, they just don’t like his policies.”

The Civitas Poll is the only monthly live-caller poll of critical issues facing North Carolina. For more polling information on Civitas polling see www.nccivitas.org/media/poll-results/.

Full text of questions:

I am going to read you a list of names, please tell me if have a favorable or unfavorable opinion of each. If you have not heard of the person, just say so:

“Barack Obama”

Favorable – 52% (+4 from December)
Unfavorable – 37% (-1)
No Opinion – 10% (-4)

If the election for US Congress were held today, would you be voting for the Republican or the Democratic candidate?

Republican – 41%
Democratic – 39%
Neither – 5%
Not Sure – 16%

Click here for full results and crosstabs.

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Unemployment Continues to Increase, Government Agenda Unaffected

Marianne Suarez — Tue, 02 Feb 2010 11:52:17 -0500

The economy, and jobs, was the centerpiece of President Obama’s State of the Union address last week, unfortunately not in the way many would have hoped. A near unanimous consensus of political analysts and pundits pre-speech pointed to the unequivocal fact that the President had no choice but to move to the center and away from his administration’s failed liberal agenda if he hoped to retain the support of the American people.

As unemployment rates across the country hit record highs and continue to increase, it has become evident that staying the course on a failed government economic stimulus program is not the way forward. The national unemployment rate is over 10 percent, while in North Carolina, according to the latest report by the state’s Employment Security Commission (NCESC), statewide unemployment has reached a record 11.2 percent, and has cost the state $4.8 billion in unemployment benefits alone this year. Contrary to the claim that unemployment is leveling off, this latest report marks a striking 0.5 percent increase in the past month and an overall 3.2 percent increase in the past year.

Only one employment sector has benefited from the Democrats’ liberal economic policy agenda and witnessed a decreasing unemployment rate – that is unions. However, these are not the unions we’ve come to know so well from the auto-industry bailouts. Union membership in the private sector has actually decreased substantially, while government union jobs are on the rise.

What good can come from a policy that is supporting the growth of government unions as the rest of the economy rests in shambles?

The answer is nothing. These government unions continue campaigning for higher taxes to fund increased government spending, while the rest of Americans are tightening their belts. Unions are a group that subsists solely on subsidies, receives artificially high compensation unsustainable in the market, and most recently has been the target for sweetheart deals exempting them from increased taxes on “Cadillac” health insurance plans.

However, the buck doesn’t stop at incentives and lobbying power. There is a reason why union jobs have failed in the private sector and that is because they can not function in a competitive market. Without competition, resources will not be appropriately allocated, profit and loss will be disproportionately affected, and prices will not dictate economic choices. What is more, unions subsist on collective bargaining – which seems rather counterintuitive. How can such an organization bargain with the taxpayer?

If the government really wants to promote sustainable long-term jobs then it needs to minimize regulations and restrictions it has placed on the private sector. Especially those that will result from the expensive and ill-devised health care and cap-and-trade legislation Democrats are unwilling to abandon. Sometimes the best thing that government can do is step back and let those in society who fuel the entrepreneurial spirit of the market dictate the way forward. It is the only way to ensure real job creation will take place and economic prosperity will ensue.

There are many people in the country who are tired of waiting for government to make good on their extensive promises. Creating more unionized government jobs will not solve long-term or short-term unemployment in our nation or in North Carolina. It is something that neither our self declared “jobs governor,” nor the President will accomplish if they choose to continue to remain attached to their liberal agenda.

Civitas Poll: Voters Increasingly Skeptical of Lawmakers Ethics

Chris Hayes — Fri, 29 Jan 2010 14:07:15 -0500

Raleigh, N.C. – Only one third of voters think the average elected official in North Carolina is ethical and honest according to a new poll released today by the Civitas Institute.

According to the live caller poll of 600 likely voters, 50 percent of voters surveyed said they thought the average elected official is unethical and dishonest, 34 percent said they thought they were ethical and honest, and 15 percent of voters said they were not sure.

Voters in all political parties agreed that the average elected official is unethical and dishonest: Democrats 46% - 35%, Republicans 55% - 33%, and unaffiliateds 50% - 33%.

“Voters are viewing elected officials in a more negative light. Less than two years ago voters had a net positive impression of the average elected official in North Carolina,” said Civitas Institute Executive Director Francis De Luca. “The continuous headlines of corruption, back room deals and the appearance that government can be bought and sold has soured voters’ opinion of lawmakers.”

In a Civitas poll in May 2008, 44 percent of voters said the average elected official was ethical and honest while 40 percent said unethical and dishonest.

There is a distinct difference in opinion on this subject based on where you think the direction of North Carolina is headed. Among voters who say North Carolina is headed in the wrong direction (54 percent of voters), 65 percent say the average elected official is dishonest and unethical. Among those who say North Carolina is on the right track (31% of the voters), 52 percent feel elected officials are honest.

All age groups agree that the average elected official is unethical and dishonest with those over 66 being the least likely to call them dishonest at 46% and those 41-55 being the most likely to call them honest at 39%.

“There is no good news in this poll for elected officials in North Carolina. As more indictments are handed down and the inevitable trials that follow make headlines, these negative numbers, and the cynicism towards elected officials it represents, will only grow worse,” added De Luca.

The Civitas Poll is the only monthly live-caller poll of critical issues facing North Carolina. For more polling information on Civitas polling see www.nccivitas.org/media/poll-results/.

Full text of question:

Do you think the average elected official in North Carolina is ethical and honest or tends to be unethical and dishonest?

Ethical and Honest – 34%
Unethical and Dishonest – 50%
Not Sure – 16%

Click here for full results and crosstabs.

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Civitas Poll: NC Not Ready to Legalize Video Poker

Chris Hayes — Thu, 28 Jan 2010 16:15:35 -0500

Raleigh, N.C. – Despite a legal challenge to the state’s ban on video poker and a rise in sweepstakes games that are similar in nature to video poker, a majority of voters in North Carolina are opposed to legalizing the games according to a new poll released today by the Civitas Institute.

According to the live caller poll of 600 likely voters, 56 percent of voters surveyed said they opposed legalizing video poker while 33 percent said they support it. Eleven percent of voters said they were not sure.

It is opposed by voters of all political parties: Democrats 54% - 34%, Republicans 59% - 30%, and unaffiliateds 54% - 37%.

“Even though sweepstakes games continue to spread across North Carolina, the voters do not support legalizing video poker at this time,” said Civitas Institute Executive Director Francis De Luca.

However, there is a distinct difference in opinion based on age. The younger a person is, the more likely they are to support legalization. Among 18-25 year olds, legalization is actually supported 51%-43%, but among people over 66 it is opposed 25%-62%.

There is a distinct split in the sexes on legalizing video as well, with women much more opposed (64%) than men (47%).

“While there is overall opposition to legalizing video poker, there are pockets of support among certain demographic groups that could change the perception of this issue as time goes on,” added De Luca.

The Civitas Poll is the only monthly live-caller poll of critical issues facing North Carolina. For more polling information on Civitas polling see www.nccivitas.org/media/poll-results/.

Full text of question:

Do you support or oppose legalizing video poker in North Carolina?

Support – 33%
Oppose – 56%
Not Sure – 11%

Click here for full results and crosstabs.

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Civitas Poll: Voters Say “No” To Second Stimulus

Chris Hayes — Thu, 28 Jan 2010 15:10:59 -0500

Raleigh, N.C. – While President Barack Obama may have made a plea to Congress to take up a second economic stimulus package this year in an attempt to revive the economy, a majority of North Carolinians disagree with the proposal according to a new poll released today by the Civitas Institute.

According to the live caller poll of 600 likely voters, 59 percent of voters said they oppose Congress passing a second stimulus bill while only 31 percent said they support the idea. Ten percent said they were not sure.

“Despite double-digit unemployment here in North Carolina, voters are keenly aware that more government spending and debt is not going to solve our problems,” said Civitas Institute Executive Director Francis De Luca.

A second stimulus package is not even supported among President Obama’s own party as 44 percent of Democrats said they were opposed to it while 41 percent supported it. Among unaffiliates (69 percent) and Republicans (72 percent), opposition grows significantly.

“President Obama stood before Congress and the nation last night and said he had gotten the message, but by proposing a second stimulus bill, it is clear he really doesn’t understand why voters are upset,” added De Luca.

The Civitas Poll is the only monthly live-caller poll of critical issues facing North Carolina. For more polling information on Civitas polling see www.nccivitas.org/media/poll-results/.

Full text of question:

Do you support or oppose Congress passing a second stimulus bill in an attempt to improve the economy?

Support – 31%
Oppose – 59%
Not Sure – 10%

Click here for full results and crosstabs.