Republican economic plan flops

The new Republican majority in the N.C. General Assembly was going to fix the state budget and the state's economy. It's not working out that well.

Despite boasting by Gov. Pat McCrory, North Carolina's economy is, overall, not much to brag about. Unemployment remains high in many counties, with only the heavily populated and well educated areas around the Triangle, Triad and Charlotte enjoying much of an economic surge. Other counties in the east, mountains and middle of the state are still flirting with double-digit unemployment.

The legislature's solution of drastically reducing the length of time a laid-off worker could draw unemployment insurance and the amount of those payments has not fired up the state's economy. Backers of this change claimed the unemployed were out of work because they enjoyed being idle, not because there were no jobs to be found. The results thus far show the Republicans were dead wrong, but it's the unemployed who are paying the price for their miscalculation.

The latest refutation of the Republican economic strategy comes from the state treasury: the state's revenues are down sharply, and officials are blaming the reduction on the legislature's revamping of the income tax. Legislators cut the state income tax for everyone and did away with any semblance of a progressive income tax. Now all taxpayers pay the same, reduced rate. As a result, the state is getting reduced revenues, and that further cuts the money available for providing state services. Reducing taxes does not automatically increase job creation and spending.

The political makeup of the legislature is locked in until after the 2020 census, when electoral districts will be redrawn, so Republicans have little motivation to admit their errors and get the state back on track. The poor performance of the Republican majority's economic experiment, however, could have an impact on this year's U.S. Senate race. Thom Tillis, the GOP speaker of the House, had planned to run on his record, which he still claims has benefited North Carolina — lower tax rates, reductions in school funding and a punitive attitude toward those who are out of work. Kay Hagan, the Democratic incumbent, has not had a stellar record, but she has not been responsible for the sinking revenues, destitute out-of-work residents and defunding of public education. 

Declining counties and booming cities

Some places in North Carolina are growing in population, but most places are not. This latest census news should be a warning to state political leaders and business people.

Population growth is confined to the major, already industrialized and well-populated counties in the Triangle, the Triad and the Charlotte area, plus coastal counties that lure retirees. The rest of the state is either losing population or is stagnant.

The result is not only crowded cities with serious congestion on highways, higher demand for municipal services and increasing housing prices, but also declining towns and small cities that struggle to keep their young people in the face of a declining tax base as housing stock ages and jobs disappear. Compound this with the decline of agriculture and the loss of local retail to the big box stores and shopping malls of nearby cities, and you can see the dilemma of small towns and poor counties.

Keeping ambitious, talented young people in smaller cities with less nightlife and fewer high-tech jobs is not easy, but state policies could help declining counties adapt before it's too late. Because representation in the General Assembly is now skewed in favor of larger cities, after decades of domination by rural districts, the legislature has less sympathy for the plight of rural areas. But unless the state can bolster the rural areas, problems in the cities will grow as rural poor people migrate to the cities for aid and services.

First of all, state industrial development policy should be tilted toward poorer counties, and these counties must be able to provide the workforce modern industry demands. That means improving K-12 education as well as community college education. Luring 100 jobs to Charlotte or Raleigh won't make a lot of difference to the local economy, but luring 100 jobs to Scotland or Tyrrell County could reshape the area. The state has to look at local impact of its decisions, and it must do more to prepare less-populated areas for the future.

Looking at the state map of population changes, I see that every N.C. county where I have called home has declined in population in the past year — Anson, Richmond and Wilson counties are slipping to one degree or another.