Stately competition

by | Jul 26, 2013 | Economy, Editor's Blog, Education, NC Politics, Tax Reform

It would be great if the North Carolina legislature took the same approach to education as they did to taxes. Ever since the GOP took control of state government, we’ve heard the same tired line about North Carolina not being competitive with other states. They usually cite a single source, the Tax Foundation, for making their case.

The problem with the Tax Foundation is that it looks at very narrow indicators, taxes, to determine a state’s competitiveness. In addition, there seems to be very little correlation between their index and employment since three of the ten “worst” states also are  listed among the top ten for lowest unemployment. Meanwhile, Nevada, one of the ten best tax environments, has the highest unemployment rate in the country.

Other indicators show North Carolina far more competitive than the Tax Foundation. Suffolk University’s Beacon Hill Institute ranked North Carolina 26th in the nation based on a number of indicators. CNBC ranked us 12th in the nation, down from 4th when Democrats were in charge. Site Selection Magazine ranked North Carolina 5th in 2012, though we were ranked first under Democrats. And I can find more, but the point is Republican have found a single source to base a radical shift of our taxes from the wealthy to the middle class while cutting vital services.

But now I’ve wandered. If Republicans took the same approach to public schools as they did taxes, we should be spending far more on education. States that spend more on education have better outcomes. North Carolina is 46th in per pupil spending and, in 2014, we will pay teachers less than 47 other states. We have the 5th highest unemployment rate, 8.8%, in the country.

If we’re going to compete with other states on one measure of competitiveness, we should compete with them on other major measures also. Education and training are certainly as important to economic development as taxes. Why don’t we compete with other states to be as good as they are?

I’m in Minnesota, a state that shares a number of demographic and geographic similarities with North Carolina. Here, they have 5.2% unemployment rate and one of the nation’s fastest growing economies. But according to the Tax Foundation, their business climate is worse than North Carolina’s. However, manufacturing is moving into the state because of investments in worker training through the community colleges, not their tax rate. In addition, they’ve taken education spending seriously and are 24th in per pupil spending and 17th in teacher salaries.

And the state has no ocean, no mountains and nine months of winter. Surely we can compete with that.



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