by | Sep 14, 2013 | Editor's Blog, NC Politics, Tax Reform | 9 comments

Rob Christensen certainly struck a nerve with Civitas. They’ve written a scathing reply to his article debunking myths about North Carolina. Civitas called his article “half-hearted and poorly researched.” Me thinks thou doest protest too much.

They took on only four of Christensen’s ten points and they were all about spending and taxes–the only thing that matters if you are of the Civitas persuasion. They ignored all of the education criticisms which may well do the greatest long-term damage to the state’s reputation and economy. Regardless, much of their criticism is overstated or subject to opinion.

They berate Christensen’s use of the AAA bond rating to argue that the state is on sound financial footing. Instead, Civitas cites unfunded liabilities, mainly related to pensions and retirements benefits, as evidence that North Carolina was on poor financial ground. They also criticize the unemployment insurance debt. However, most states faced very similar problems caused by the recession but they didn’t choose to solve them on the backs of those most hurt by the economic collapse. The North Carolina legislature did.

Civitas complains that government was on a spending spree. They say spending “more than tripled” from 1979 to 2009. I bet a closer look would show that most of that spending went to public education, which had been underfunded for decades, and the addition of early childhood programs that have proven beneficial to children of underprivileged families.

Civitas also wants to stick to their guns about North Carolina being a high tax state with a poor business climate. That’s malarky. As Christensen points out and as Civitas concedes, we’re in the middle of the nation when it comes to taxes as a percentage of income. But Civitas continues to compare our tax rates to South Carolina and Tennessee. We don’t want to be like those states.

Christensen correctly notes that North Carolina has consistently been rated one the top states for business, but Civitas criticizes him for using Site Selection Magazine. In a stinging rebuke, Civitas says, “Christensen should be embarrassed for not questioning the methodology that somehow ranks a state with the third-highest unemployment rate as having the top business climate.” But it’s not just Site Selection Magazine. It’s Forbes, CNBC, Chief Executive and other business-friendly organizations–and it’s on the Department of Commerce’s web site.

But to follow Civitas’s logic, according to the Tax Foundation (the group they always cite), Minnesota, with its high taxes and unions, has an even worse business climate than North Carolina. They should be suffering. Instead, they’ve got one of the lowest unemployment rates in the nation as well as one of the fastest growing economies. So, it seems business climate is pretty subjective. However, it stands to reason that if companies relocate here because of low-taxes and low-wages, they’ll leave for the same reason. Remember the textile industry?

Their argument about in-migration seems to prove Christensen’s point that taxes aren’t keeping people away. By their own assessment we’re attracting people from high tax states, not losing them. We’re among the fastest growing states in the nation and our current unemployment is due more to a growing workforce than a loss of jobs.

North Carolina has plenty of problems, particularly in the rural areas. Unfortunately, Civitas and the Republicans suffer from a distressing lack of imagination and only see two answers to every problem–cut taxes and cut spending. In their world view, the poor and middle class have been given too much while the wealthiest have been asked to pay too much, despite the fact that the rich are getting richer while the rest of us struggle. What a bunch of whiners.


  1. Frank McGuirt

    Mike hit the nail on the head….the MIDDLE CLASS are the job creators. No one will invest in the production of widgets unless there’s someone to buy them. Simple.

    • Thomas Mills

      Thanks for reading, Sheriff. Hope you’re doing well.

  2. Alex Jones

    P.S.- I hate to play devil’s advocate, Mike, but there are some flaws in your theory. Most importantly, consumption has risen from 64%-71% of our economy at the same time income inequality has exploded. The increase may have been financed by debt, but still firms faced no structural shortage of demand. In fact, one theory suggests that inequality inspires a “keeping up with the neighbors” mindset that leads to over-consumption. Excessive inequality corrodes many aspects of the economy. Aggregate demand just doesn’t appear to be one of them.

  3. Alex Jones

    Good post, Thomas. It’s incredible that they keep beating the drum about our “debt.” According to the Pete Peterson-funded Fiscal Times, we have one of the four most solvent pensions in the nation. Even Fox Business invited Treasurer Cowell on to tout our financial discipline. Over time I have noticed that these hardline fiscal conservatives don’t know very much about public policy. Maybe that’s why they systematically fail in office.

    • Thomas Mills

      Thanks, Alex.

  4. Carl Johnson

    Excellent research and reporting on your part. Yet, I fear you missed what had become the real point. Facts that belie the myth are simply unacceptable to Civitas and the Art Pope coalition..from McCrory on down. They have their spin and in the vast echo chamber of Popedom, that’s the only source that is acceptable.

    Personally, I believe that the Pope crowd is going to be in for a huge surprise in 2014 and again in 2016, presuming the GOP/NCGA hasn’t outlawed elections by then.

    Keep on fighting the good fight, sir.

  5. Mike Hanes

    Riddle me this, if the GOP kills the middle class, who’s going to buy houses, cars, and shop in stores? Aren’t customers, i.e. the middle class the real job creators; as without them, jobs disappear and the poor have no level to aspire too, no matter how rich the top 1% is….

    • Kathy B

      Your questions is completely valid but to answer it requires forethought and long range planning, neither of which is the strong suit of the civitas crowd.

    • Mark Irby

      That’s what all of these “job creators” don’t seem to be aware of. No matter how low your taxes are you are not going to create jobs until you have customers….

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