The coming budget year presents some familiar challenges for local governments. Essentially, they’re going to have to learn to do more with less.
The economic reality is not unlike the situation in 2002, when local governments faced a decline in revenues and also an aggressive state government that took millions in promised revenues. But this year is different in many ways. Citizens are loath to accept tax increases, and accountability expectations are much higher.
Amid this sea of uncertainty, there are those who say local governments don’t have that much control, as the state dictates so much of what they must do and how much they must pay. While there is a great deal of truth in such a belief, local governments can and should push legislative leaders to do more to protect local revenues and head off unnecessary tax increases.
First and foremost, city and county government should pass resolutions asking the state to disallow local financial incentives. These are chronic wastes of time and money at the local level. Such grants of taxpayer money inevitably go to companies already in the community, or are provided to companies moving from county to county, resulting in a net revenue decrease rather than a creation of jobs.
Worse yet, many of these companies have laid off employees, shut down, or gone bankrupt. In
Lee County, Redman Homes received more than $110,000 in grants. They’ve gone out of business. Moen Corporation was paid more than $220,000 and has laid off hundreds of employees. And pharmaceutical giant Wyeth has been paid $4.4 million, and has been approved for an additional $1.8 million, even as they are now going through their second layoff period affecting another 100-plus employees.
The only company that has been brought to Lee County through incentives was Moore Machinery, scheduled to receive $289,000. The great distance they traversed to make their move to Lee was from neighboring Chatham County. Counties across the state talk of similar incentive stories. Had the legislature removed such giveaways, counties would have a great deal more revenue and possibly much lower tax rates to attract new businesses. Incentives haven’t saved business and industry; they’ve simply lowered revenue. A resolution from counties could have a profound impact.
For counties, and some cities, passing a resolution in support of lifting the charter school cap also could be profound. The state currently has the cap set at 100, an arbitrary number based on the fact that North Carolina has 100 counties. The problem is that when a county like
Wake can have 14 such schools, the rest of the state isn’t so lucky.
Most local officials have a poor understanding of charter schools, so here are some facts. Charter schools cost local taxpayers zero dollars in capital costs. For counties that have growth issues requiring multimillion-dollar school construction projects, charters could save substantial money. They also offer parents a public school choice when the public schools might not be providing ample educational opportunities for students.
Duplin County has a graduation rate just shy of 60 percent. The folks who created the Francis Bacon Academy in Brunswick and Columbus counties decided a charter might be a good idea for Duplin. But the state refused, and Duplin is faced with continued educational and financial woes. There were more than 20 bills introduced last year to raise the charter cap. A bit of a nudge could be instrumental.
Bringing statewide change from the bottom up isn’t easy, but it’s the way the system can work. Getting rid of the local portion of Medicaid was an uphill battle in spite of the fact that North Carolina was the only state in the country still forcing counties to pay a set portion of the Medicaid bill. But counties persisted, and the law was changed. It’s time for local governments to step up and push for issues on behalf of their constituents. Pushing for zero-cost options like charter schools and getting rid of local corporate welfare is a good start.
Chad Adams is vice president for development for the John Locke Foundation, director of the Center for Local Innovation, and former vice chairman of the Lee County Board of Commissioners.