You know North Carolina has jumped off the cliff into the abyss when even two conservative figures with close ties to the John Locke Foundation are deriding the latest budget and tax policy choices made by state leaders.
“Some 60 years ago, the founding fathers of the new North Carolina – transforming an agrarian society into an educational, technical and industrial state – folks like the late Bill Friday, Archie Davis, Gov. Luther Hodges and others saw the future salvation of our beloved state by heavily investing in education.
Their efforts have produced, among other things, a very strong UNC system of 16 campuses, parallel with the creation of the incomparable network of community colleges. They also advocated a strong N.C. Symphony, N.C. Museum of Art and other cultural and artistic institutions to attract educated and culturally inclined people to the state. Investing in education has paid off. N.C. economy has thrived because of its excellent public universities. UNC-Chapel Hill alone brings in annually around $900 million in research money and grants. It is truly frightening to see what the legislature is doing to the budgets of UNC system, N.C. community college system and UNC-TV.
With the deep cuts in funding education, the next 60 years look bleak and onerous. As one citizen, I am asking not to cut taxes. I am willing to pay more than my fair share to spend on education.”
Meanwhile, here was longtime Locke Foundation scholar Prof. Mike Walden of N.C. State in a solid Sunday column by Rob Christensen on the N&O:
“But the legislature’s reliance on huge tax cuts is a major gamble for the state. Michael Walden, an economist with N.C. State University, said that while everyone likes to pay less tax, there’s little evidence that lower taxes will actually have much of an effect on the state’s economic growth.
‘The preponderance of evidence that has been published by economists in peer review journals is that state taxes have at most a modest – modest – impact on economic growth,’ Walden said. ‘The reason is that states have to operate under a balanced budget. When they cut taxes they usually have to cut services. Businesses benefit from state services. They benefit from an educated work force. They benefit from the transportation system.
‘So will the cut in state taxes set off an economic boom in North Carolina? I would say based on the literature that I have looked at, which is extensive, no.’
There is some evidence, Walden said, that a reduction in corporate income taxes can have a modest impact on growth. But he said assertions that the tax cuts will pay for themselves – or even produce more tax revenue, as Republican leaders suggest – have been debunked in numerous independent studies.”