Aug. 19 (Bloomberg) — North Carolina is channeling Alabama and South Carolina when it comes to the best economic, social and political model for a U.S. Southern state.
For more than half a century, North Carolina has been progressive on education and public investments, and pro- business — witness the celebrated Research Triangle between Raleigh, Durham and Chapel Hill and the financial center in Charlotte — with less racial strife than other Southern states.
As Republicans took full control of the state government in Raleigh, there has been a shift to the right. Taxes for the wealthy have been slashed, and spending for education and programs that benefit the poor have been cut. Abortion has been restricted, and guns rights expanded.
At the end of the legislative session in July, in a state that has enjoyed relatively good race relations — which the business community both encouraged and benefited from — voting privileges for blacks were targeted.
Governor Pat McCrory, a Republican elected last year, says the turn to the right is necessary and is paying off.
“We’re getting tremendous positive feedback from the business community,” he said in an interview. His state had “lost its focus,” and needed to be “shaken up.”
To critics, this conservative agenda — much of it orchestrated by Art Pope, the governor’s budget director and the multimillionaire retailer who is the Tar Heel State equivalent of the Koch brothers — threatens the state’s legacy.
“We’re turning back everything that made us different from other Southern states,” said Jim Goodmon, the chairman of CBC New Media Group LLC and owner of the Durham Bulls Minor League baseball team. “With this shift, economic development is broken.”
Ronnie Bryant, the chief executive officer of the Charlotte Regional Partnership, the area’s top economic development recruiter, recently complained to the Charlotte Observer that all the efforts of recent years to promote Charlotte as a business center “have been negated in the last few weeks.”
He said business leaders elsewhere are asking: “What the hell are you guys doing?”
Ann Goodnight, a powerful advocate for higher education in the state whose husband is CEO of the giant technology company SAS Institute Inc., wrote a letter to the Raleigh News and Observer charging that cuts in education funding were a “grievous mistake.”
The places that succeed in economic competitiveness, she wrote, “are investing in education and using the playbook we once embraced.”
The biggest firestorm erupted when the legislature changed voting procedures, requiring a state-issued photo ID, limiting early voting and ending same-day registration — practices used disproportionately by blacks.
“They are extremists, and are playing the race card,” said the Reverend William Barber, head of the state’s chapter of the National Association for the Advancement of Colored People, which is organizing multiracial coalitions around the state, and turning out thousands to protest these changes.
On taxes, the Republicans cut the corporate rate, ended the progressive personal income tax and eliminated the estate tax, which affected, on average, fewer than 75 families annually and will cost the state $300 million in lost revenue over the next five years. The legislature also decided not to continue the earned-income tax credit for the working poor.
North Carolina requires a balanced budget, and new expenses must be offset elsewhere.