At the beginning of every legislative session it is good to take stock of where North Carolina is and where it is headed. No doubt legislative leadership will point with pride to their 2013 legislative accomplishments. But before taking a victory lap perhaps they need to consider the bigger picture.
Economists agree that the biggest economic downturn since The Great Depression is now behind us. North Carolina’s unemployment rate, which peaked at 11.2 percent in 2009, dropped to 9.4 percent by January 2013 and now equals the national average of 6.3 percent. But there’s more to this story. John Quinterno, head of South by North Strategies, a research firm that specializes in economic and social policy, says North Carolina has fewer jobs, more unemployed residents and a higher unemployment rate than we reported six and a half years ago.
More importantly, the 1.6 percent pace of payroll growth has not improved over the past year.
“No matter how one cuts the data, North Carolina has experienced the same slow rate of job growth for the last four years,” Quinterno states.
The Office of State Budget and Management reaffirms that lack of growth by reporting collections are 2.1 percent below what was anticipated and will result in a $445 million state budget revenue shortfall for the year ending June 30. It also downgraded next year’s revenue projections by almost $200 million.
North Carolina’s economy is sluggish, at best. Employers are not hiring because they don’t trust this economy. Banks are not lending for much the same reason. Fewer employed residents earning fewer dollars will trickle through every sector of our economy and continue this tepid growth.
To jump-start our economy we need look no further than our history to show us how. Following the Revolution we built 500 miles of “plank” roads. In 1856, the North Carolina Railroad opened 233 miles of track between Charlotte and Goldsboro. In 1921, Gov. Cameron Morrison convinced the legislature and the public to pass $50 million in road bonds and we built 5,500 miles of roads. Following World War II, Gov. Kerr Scott led a successful $200 million road bond effort for farm to market roads. But the biggest of them all was the $3.1 billion higher education bond package passed in 2000.
Be assured there were voices throughout that history saying that we couldn’t afford it, that it wasn’t government’s function and that the timing wasn’t right. Fortunately we had bold progressive leadership that didn’t listen.
The lesson is clear: To significantly improve North Carolina’s economy we need a well-planned public infrastructure improvement program, financed by low-interest rate bonds repaid in large measure by resultant growing tax revenues. Twenty-eight thousands new private-sector jobs will be created from every $1 billion spent in construction.
From 2000-2010 North Carolina’s population grew by 18 percent, about 100,000 people per year. Twenty percent of our population is under age 18, demanding more public school buildings. DOT says we need to spend more than $25 billion to build new and repair current roads. Other reports estimate the needs for expanding and repairing water and sewer systems at $30 billion.
We need public infrastructure and we need jobs. But mostly what we need to get our state moving forward is bold leadership.
Tom Campbell is former assistant state treasurer and is creator/host of NC SPIN, a weekly TV discussion of N.C. issues airing Sundays at 9 a.m. on Time Warner Cable Channel 69 and Channel 65 Contact him at www.ncspin.com.