North Carolina, a National Leader

North Carolina will have a change in governor in 2017, but there is a good chance Roy Cooper will continue the policies that have allowed North Carolina to do so well in the past four years. I write this column before 2016 ends, but the federal government has estimated that North Carolina will finish 10th in the nation in GDP growth for the year. North Carolina is also in the top third in job creation, net domestic immigration and income-growth. North Carolina is one of only a handful of states to have high achievement in all of these areas.

The Democratic Party is in the midst of a post-mortem after the election to see what it can do to win future elections. The p arty also should be engaging in a change in strategy to try to better help the “blue” states so they can perform more like North Carolina. We already have seen Detroit declare bankruptcy and I predict that the state of Illinois will before too long.

One of the most telling statistics is how people are leaving blue states. The 10 states that Hillary Clinton won by the largest percentage margins each had net negative domestic migration in 2004-2014. California and New York combined to lose 2.75 million residents to other states. The 10 states that Donald Trump won by the largest margins each gained population over that 10-year period.

The top states receiving people from other states during that period were Texas, Florida and North Carolina. People are voting with their feet and millions are leaving states that have heavy regulation, high tax rates, excessive environmental regulations and higher minimum wages — essentially, the so-called “nanny” states — to come to places such as North Carolina.

The irony for many progressives is that all of these measures, intended to help the common good, actually have a huge negative impact on income equality. The three states with the largest income inequality gaps are New York, Connecticut and Massachusetts, all “deep blue” states.

The measures, above all, show what North Carolina has achieved. A further “reward” for North Carolina is that the ALEC-Laffer State Economic Outlook has ranked North Carolina second in the nation in what is likely to happen in the future. The top 12 states in outlook were all carried by Donald Trump. The bottom nine were all won by Hillary Clinton, including New York at 50th, California at 46th, and Illinois at 43rd.

Since 2012, North Carolina’s Economic Outlook measure has improved each year from 26th to 23rd to 22nd to sixth to fourth and now second. What can we still do to get stronger? Out of the 15 measures that comprise the Economic Outlook, we are 34th in percentage of public employees, suggesting that our government is not functioning as efficiently as most other states. Also, we have the 24th highest marginal personal income tax rate, so additional cuts there will help North Carolina.

Unlike the federal government, states cannot print their own money, so they must run balanced budgets over the long run. They can get away with gimmicks such as maintaining unfunded liabilities, but such tricks will eventually catch up with them. Gov.-elect Cooper and the rest of the North Carolina legislators would be wise to keep us on the track of outstanding state performance.

Eric Dent is Endowed Chair Professor of Ethics at Florida Gulf Coast University.

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