Protect Our Paychecks
Before Republicans took over the General Assembly in 2011, North Carolina was facing an economic crisis. Decades of irresponsible tax and spend policies by Democratic leaders left the state unprepared for the recession, and when it hit, North Carolinians like you were forced to pay the price for those bad decisions. Democrats slashed teacher pay, cratered education funding, and froze first responder salaries to cover the budget shortfalls precipitated by their reckless spending.
On top of that, hardworking North Carolina families and businesses were saddled with the highest taxes in the Southeast, and the double digit unemployment rate was the fifth highest in the nation. Since taking over, we have focused on responsible budgeting and pro-growth economic policies which have North Carolina’s economy booming.
While the reforms we have made over the past eight years have been transformative to the state, they have been anything but easy. When we took charge in 2011, we faced a $2.5 billion budget deficit, so immediately we began the lengthy and difficult process of rebuilding the state budget. We streamlined state government, consolidating and cutting waste and bureaucracy – all without raising taxes. We spent responsibly, restoring education funding and reinstituting regular salary increases for first responders and teachers. The result has been a resurgence in North Carolina’s fiscal health, including four consecutive budget surpluses of more than $400 million. The budget continues to follow a predictable and sustainable trajectory, and the rainy day fund, neglected under Democratic control, is now one the strongest in the country.
As Republicans, we know that private citizens spend their money better than government spends their money. By balancing the budget and keeping spending at responsible levels, we’ve returned billions of dollars back to the people of North Carolina.
Our focus on reducing the tax burden to put more money back into the pockets of hardworking families and businesses kickstarted the economy and allowed North Carolina to thrive. We started the process in 2013 with the 2013 Tax Simplification and Reduction Act which simplified the tax structure while reducing the individual and corporate tax rates. Between this act and legislation passed in the following years, the individual income tax rate has dropped from a high of 7.75 percent and will be 5.25 percent in 2019, while the corporate tax rate has dropped from a high of 6.9 percent and will be 2.5 percent in 2019. Our tax reform has been a model for the rest of the country and North Carolinians are paying $2.7 billion annually less in taxes as of FY 2018-19; in fact, 99 percent of North Carolina taxpayers are either paying less or no state personal income taxes at all.
Since 2011, over 600,000 new jobs have been created and the unemployment rate has been cut in half. We completely reformed North Carolina’s broken unemployment insurance program; paying off a $2.7 billion debt to the federal government, and the state’s unemployment reserve has grown to $3.1 billion as of May 2018. Once this massive debt to the federal government was paid off, we were able to lower the state unemployment tax in 2016 from $126 to $42 per employee which is a 67% reduction in unemployment taxes on job creators and businesses. These changes made North Carolina’s unemployment system solvent and removed one of the biggest impediments to job creation and economic growth.
Republicans understand that for North Carolina’s private sector to create lasting jobs, we need to get government out of the way. That’s why we have passed more than a dozen regulatory reform bills since 2011, reducing the amount of red tape that holds back business development in North Carolina and encouraging economic development. While lower personal and corporate income tax rates and less onerous regulations have made North Carolina more attractive to businesses, we have continued efforts to grow the state’s economy by changing the business incentives program to attract major companies that will bring thousands of new jobs to the state.
Thanks to these historic reforms, business is booming in North Carolina, and our state is getting recognized for it. According to the Tax Foundation, North Carolina’s business tax climate has jumped from 46th all the way to 12th, and the American Legislative Exchange Council ranked North Carolina’s economic outlook seventh in their most recent report after being ranked as low as 26th.
We know those reforms have made us more competitive than ever before – and we believe the change to our business incentives is the final piece of the puzzle that will put us over the top when it comes to recruiting thousands of new jobs and billions in new investment to our state.