RALEIGH – Two new studies out this week confirm North Carolina’s continuing success in claiming top honors in the areas of government spending and taxation.
The latest Sourcebook from Governing magazine was just published, comparing state and local governments across the U.S. in a variety of spending and outcome categories. I don’t want to go into a lot of detail now, but suffice to say that North Carolina ranks 2nd among the 11 Southern states in total spending per person ($5,515, exceeded only by Tennessee’s $5,587). We were 4th in the South in total spending as a percentage of income (22 percent, including federal funds expended by the state for Medicaid and other programs).
One table was particularly revealing as state officials hyperventilate about possible government layoffs: North Carolina ranks 1st in the Southeast in the percentage of the population employed by state and local government. Approximately 7.4 percent of North Carolinians are state or local employees, which is higher not only than the rate in every other state in the region but also the rates in New Jersey (6.2 percent), New York (6.8 percent), and Massachusetts (5.9 percent).
Speaking of so-called “Taxachusetts,” a report released Wednesday by the Tax Foundation confirmed that North Carolina’s average state and local tax burden (10.1 percent of personal income projected for 2002) is higher than the burden in Massachusetts (9.5 percent). In our region, North Carolina’s state and local tax burden is exceeded only by Georgia’s 10.2 percent, and is just a tenth of a point below the national average. This is the highest tax burden North Carolina has posted in recent memory.
Oh, but didn’t we cut taxes “massively” in the 1990s, thus causing our current fiscal mess? No. The state/local tax burden was 9.6 percent in 1992. The trend in the past decade has been up, not down.
North Carolina is at or near the top of the regional heap in virtually every measurement of government taxes and spending available. Perhaps we should replace the tagline “First in Flight” on our license plates with “First in Bloat.”