State economic-growth strategy obsolete, governor says

Jan. 25, 2013 @ 05:46 PM

North Carolina’s leaders need to revamp an economic-development strategy that’s gone without significant change since the mid-1980s, Gov. Pat McCrory told a statewide coalition of county officials on Friday.
“Anybody who’s living off a 1985 plan in the private or public sector probably isn’t doing too well,” McCrory told delegates to a meeting of the N.C. Association of County Commissioners. “That’s why we’re looking at tax reform right now. We are not competing successfully against our neighboring states in Virginia, Tennessee and South Carolina.”
The governor added that one need look to “any town with a ‘boro’ at the end” of its name to see that the state’s private sector is lagging, with potentially blight-triggering consequences.
“We have to build the private sector. We have no choice,” McCrory told the assembled county officials. “If we continue to have the largest employer in each of our counties either be the hospital or the county government, the economic model will not hold up.”
The Association of County Commissioners was meeting Friday in Durham’s Sheraton Imperial hotel to put the finishing touches on its legislative wish list for the 2013-14 term of the General Assembly.
That made the venue for McCrory’s comments a county whose two largest employers are private-sector concerns, Duke University and IBM.
County Manager Mike Ruffin’s government doesn’t even rank among Durham’s top 10 employers, according to figures his staff assembled last year from the Greater Durham Chamber of Commerce and the U.S. Bureau of Labor Statistics.
The Durham Public Schools system ranks third on the list.
The governor – in office for less than a month following his win in last fall’s election – pointed to North Carolina’s umemployment rate to butress his argument. As of December, it stood at a seasonally adjusted 9.2 percent, fifth-highest among the 50 states.
Virginia’s umployment rate was 5.5 percent, but that state hosts many suburbs of Washington, D.C, and is widely understood to have benefited over the years from the post-9/11 defense boom.
South Carolina’s unemployment rate in December was 8.4 percent and Tennessee’s 7.6 percent.
But U.S. Census Bureau figures from 2011, the latest available, indicate that median and per-capita incomes in those states lagged North Carolina’s.
The governor’s mention of tax reform alluded to conversations now under way in Raleigh about whether and how to shake up the state’s mix of taxes.
Some members of the state Senate, along with foundations financed by McCrory’s budget director, Art Pope, have floated the idea of doing away with the state’s corporate and income taxes in favor of financing a larger share of the state’s budget from sales taxes.
But Pope himself has told reporters he’s not keen on the idea, as it would be “regressive in nature.”
McCrory told the assembled county leaders – the association lobbies for all 100 North Carolina counties – that beyond insisting on revisions to a “40- to 50-year-old tax system,” he’s keeping his options open while his staff mulls an assortment of ideas.
“I am not drawn to any one particular plan at this time,” he said. “I’m looking at all the pros and cons, and also [at] what’s politically practical to get passed, too.”
The governor’s comments to the group played up both his ties with and desire to work with local elected officials.
He is a former mayor of Charlotte and only the third North Carolina governor since World War II to come to the office with a local-government background.
McCrory attained statewide promience early in the 2000s as an opponent of former Gov. Mike Easley’s decision to siphon money from city and county governments to balance the state’s budget during the post-9/11 recession.
“Next time I come, instead of me talking to you, I’ve going to have you talk to me,” he told association delegates at the conclusion of his appearance. “It’s going to a converation.”