Our state has been suffering with high unemployment and sluggish economic growth since the 2008 financial crisis primarily because of an inadequate educational system, high taxes and poor investments by state government.
It is instructive to remember that North Carolina, devastated in 1880 from the post Civil War era, emerged in 1900 as one of the strongest economies in the South after investments by individuals and farmers created the textile and furniture industries.
With a new governor and pro-growth leadership in the General Assembly, we now have the opportunity to reinvigorate North Carolina’s economy by making bold but sensible policy changes.
Entrepreneurial small businesses are the state’s primary job creators, but we must develop the best possible environment to encourage new business investment.
To make North Carolina the leading job creator in the country, we must:
- Eliminate all state income taxes. An income-tax-free state will attract investment capital and high-growth entrepreneurs. Private-sector investment is critical to the growth of our economy and job creation. Reducing taxes allows families and small business entrepreneurs to efficiently allocate capital, which will grow our economy and jobs.
- Offer school scholarships to promote choice and market-based educations. Many education reforms will be discussed this year, but nothing would improve student achievement more than market-based education. About 55 percent of the state budget is spent on education. Family-based choice would save billions of dollars and dramatically improve educational opportunities.
- Although it might be controversial, we should consider privatizing many functions of the UNC system to make it more efficient with a goal of reduced dependence on taxpayer dollars. Students, based on means testing, would be provided with scholarships to attend public or private schools from kindergarten through college, transforming our primary and secondary schools from below average to the best in the nation. Helpfully, the charter school cap of 100 has been lifted and, this year alone, the state has applications for 161 new charters.
- Reduce spending and unfriendly business taxes. This will allow the private sector to invest and create jobs. Agencies should become more efficient, and each year the continuing budget should be reduced by 5 percent annually. Since 2008, most businesses and families have cut their budgets and reduced debt. Now it is time for our state and local governments to make the cuts necessary so that our economy can grow and produce jobs.
- Eliminate economic development incentives and all special programs with estimated savings in the hundreds of millions of dollar. These programs are not needed in a market economy with the elimination of income taxes. All businesses will have equal incentive to invest.
Our state budget is riddled with special interests, government interventions and seemingly good ideas that cannot be executed well by government. The free market can and will provide the solutions when left unfettered. The state must return to its traditional role, which includes ensuring public safety and a strong jurisprudence system.
North Carolina is one of the most diverse and beautiful states in the country. With the leadership of our new governor and the General Assembly implementing the right policies, we can be a model for economic prosperity.
Bob Luddy is founder and president of CaptiveAire Systems, Inc. and a Job Creators Alliance member. He is also chairman of the Civitas Institute’s Board of Directors.
This oped originally appeared in the News & Observer.