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Mitch Kokai: Put NC at front of line for recovery

By Mitch Kokai

The furor over COVID-19 will fade. Eventually.

Once that happens, North Carolina will compete in the national race toward recovery. Decisions policymakers make today will help determine how well the Tar Heel State fares in the post-pandemic world.

It’s hard to look into the future as debate over current economic restrictions dominates the headlines. Politicians, health officials, economists and other experts haggle over the best response to COVID-19. Business owners, workers and the rest of the state try to make sense of confusing, competing and sometimes contradictory pronouncements from those in power.

Underneath the noise, though, some policymakers are looking ahead. They want to ensure that North Carolina is well-positioned to take advantage of the world COVID-19 leaves in its wake.

“On the one hand, we’ve got to take care of today,” said Sen. Paul Newton, R-Cabarrus, during a virtual town hall sponsored by the John Locke Foundation. “We are seeing budget deficits on the horizon. But the good news there is that good, fiscally conservative policies over the last decade have really put us in a position to have a rainy-day fund, to have a budget surplus.”

Good decisions place North Carolina in a stronger position than many other states coping with COVID-19’s economic hit.

“It’s also important, in my view, to think about tomorrow,” Newton said. “Tomorrow’s going to come. We are going to reopen. We are going to see more economic activity.”

Newton’s specific proposals for North Carolina’s post-COVID-19 economic environment include franchise tax relief and a legal “safe harbor” for new and reopened businesses. Policies Newton and his colleagues adopt today should send a message.

“My point to the rest of the world is: North Carolina is going to take care of today,” he said. “We’re going to do everything we need to do to be fiscally sound, but we’re also going to look to tomorrow. … As site-selection consultants consider where to repatriate manufacturing, where to grow their businesses, we want North Carolina to be top of mind.”

To reach that top position, North Carolina must consider businesses’ needs. “We have got to offer what job creators want,” Newton said. “I’ve heard leaders say this: ‘We’re good. North Carolina is a great place to be. … We don’t need to do any more.’”

Newton doesn’t buy it.

“We have to do more every single day to exceed the value proposition that job creators want, that individuals want, that families want,” he said. “We have got to offer a quality of life, a tax structure, a regulatory structure that is second to none. Our competitors are working to beat North Carolina every single day. We just cannot forget that. Never get complacent.”

The senator is not alone in thinking about ways to “win the economic recovery.” That’s a phrase John Locke Foundation CEO Amy Cooke uses frequently. Her research team kept those words in mind while developing Carolina Rebound. It’s an “economic game plan,” in Cooke’s words. With sections on budget and tax issues, education, health care, and regulations, Carolina Rebound offers policymakers more than 70 recommendations. Proposed policy changes would place North Carolina in a better position to recover from the pandemic. It’s not a policy paper designed to gather dust on a shelf. Newton is among those taking notice.

“We are a life-cycle state in North Carolina,” Newton added. “(If) we stop working on that, then suddenly the next generation — people are going to go out of state to work, or they’ll go out of state to retire, or they’ll go out of state to get educated.”

That type of change would have devastating consequences.

“We have to continue to improve … or we will lose population,” Newton warned. “Effective taxation is a really simple concept. If you’re growing your rooftops, you can spread your tax liability, keep your tax rates low, and no individual feels the burden.”

No one should expect North Carolina to reach a final economic goal, Newton said. “We’re never there. Anyone who thinks there’s a goal line is wrong. The standard always changes. Continuous excellence is required.”

For now, there’s a simple starting point for Newton: “The bottom line is we have got to get the economy going again.”

Mitch Kokai is senior political analyst for the John Locke Foundation.



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