The state budget finally making its way through the General Assembly tells us something about Phil Berger: He has not changed his mind. This budget contains a further $2 billion dollars in corporate tax cuts coming on the heels of a decade in which our corporate tax was all but eliminated. Actually, this budget finishes the job. Berger and his compatriots in the legislature firmly believe that their policy revolution has been a huge success. The problem is that they are wrong.
To hear them tell it, before 2011 North Carolina was run by left-wingers. One influential conservative writer often contrasts “constructive conservatives” with what he ominously calls “the left.” We supposedly bore the burdens of high taxes and stifling regulations, a failing school system, and a government that did not appreciate the critical importance of a strong business climate. All of this is nonsense. In reality, North Carolina ranked forty-sixth in per-capita state spending growth between 2000-2010. We had a AAA bond rating and a top-ranked business climate. But none of those facts interest the ideologues who gained control of the General Assembly one decade ago.
Repudiating these imaginary failures, Republican legislators set about slashing state government. Their first budget cut the UNC system by 15-18% depending on the campus–a jab at academic excellence motivated by decades of pent-up resentment of the intellectual liberalism nurtured in Chapel Hill. In 2013, legislators passed, and feckless Governor Pat McCrory signed, a regressive tax cut package that transformed the revenue picture facing state government. The tax cuts cost state government billions of dollars in structural revenue flows, and McCrory, in his typically impotent and intellectually vacuous way, signed the bill despite his stated insistence that reform be revenue neutral.
Don’t take Pat McCrory seriously.
By the end of a decade of right-wing rule, North Carolina’s state government was smaller as a percentage of GDP than it had been in 50 years. State spending relative to the overall economy was 30% lower than the 50-year average, and even lower than the averages that prevailed before the Great Recession necessitated spending cuts. Republicans are very proud of this record. But let’s take a look at what it has meant for North Carolina’s economy.
One of the first warning signs that the NCGOP’s strategy would fail came in their first year of unified control. The state fell out of the top 10 in business climate according to CNBC. Our business climate would consistently rank lower under the McCrory-Berger-Moore trifecta than it had during the supposedly socialistic years of Democratic control. The reason: intolerance. Only when Governor Roy Cooper defeated McCrory and restored some semblance of pluralism to our political and social climate would companies become comfortable investing in our state.
The statistics, meanwhile, are sobering. Since Republicans took control of the General Assembly, GDP growth has fallen by roughly 50%. Republicans boast about cherry-picked statistics and rankings devised by right-wing lobby groups like the American Legislative Exchange Council, but the reality is that personal income growth in the state has badly lagged the national average. This is a stark reversal of the trend that prevailed during a century of Democratic rule, when the state steadily climbed toward the national median. To the extent we have experienced economic growth, the vast majority of it has been in urban areas that were already prospering before Republicans took control. Fifty-one counties, by contrast, are losing population.
Numerous individual companies have abjured investing in the state because of the policies Republicans have implemented. Toyota-Mazda adjudged the state’s workers too poorly trained to staff an auto plant. Amazon actually put Raleigh in its top three of finalists for the vaunted HQ2–but took a pass on us because of the legacy of HB2. What has happened with these blue-chip companies reflects what has happened to the state under the reign of Bergernomics: failure and decline.
Alexander Jones is an original contributor to PoliticsNC.