Opinion: Daily Journal

Pivot Back to Markets

Over the past four years, state policymakers in Raleigh have adopted a series of sweeping changes in public policy, including a new state tax code, school choice, new energy policies, election laws, and historic reforms of the regulatory process. Some North Carolinians have welcomed these changes. Others have decried them. Few would deny, however, that they have been dramatic and far-reaching.

What happens next? Gov. Pat McCrory wants to issue billions of dollars worth of bonds to refurbish state highways and facilities. Some legislative leaders hope to craft another phase of sweeping changes in tax policy and education.

I don’t know how these major initiatives will fare, and I certainly respect state leaders for continuing to think big. But it’s also important to think small — that is, to look for pivots and points of leverage where seemingly modest pieces of legislation can produce a significant force for progress in North Carolina. Here are three policy levers lawmakers should operate during the 2015 session:

Open up more professions. The state requires official licensure or certification for many more occupations than just doctors and lawyers — more than 150 at last count. Few states regulate as many occupations. While purportedly intended to protect public health and safety, most of these licensing laws are really designed to exclude new providers from offering services, thus denying choice and hiking cost to consumers. They also help to explain why North Carolina ranked 36th in the nation in regulatory freedom according to the John Locke Foundation’s new “First in Freedom Index” (FFI).

Colorado has the country’s least-restrictive approach to professional licensure. Let’s copy it. At a stroke, that would expand opportunities to pursue new careers or start new businesses for many North Carolinians, reduce consumer prices for everyone else, and boost North Carolina’s FFI ranking in regulatory freedom to 20th.

Invite more competition in medical services. North Carolina uses an archaic system for regulating hospitals, physician practices, and other providers of medical services. Each time they add a new location or major service, they have to get a “certificate of need” from the state. By limiting competition, this CON policy inhibits patient choice and drives up costs. The shocking conclusion here is that central planning by government is inferior to decentralized decisions within competitive markets.

More than a dozen other states have long since abolished their CON regulations. North Carolina should do the same this year, raising our FFI ranking in health care freedom to 25th from its current, dismal 46th.

Promote choice and competition in public education. North Carolina now has an Opportunity Scholarship program that assists low-income and disabled students whose parents believe that private schools would best meet their individual needs. Perhaps you like this idea. Perhaps you detest it. But it’s important to understand that there are many different ways to promote choice, competition, and diversity in education. In Colorado, for example, parents have more say than their North Carolina counterparts do in determining which public schools their students attend. Colorado also has a stronger charter-school law and more opportunities for students to access public-school offerings through digital technology.

If North Carolina provided as much public school choice as Colorado does, our FFI ranking in educational freedom would rise from 18th to 13th. Judging from past experience and the preponderance of academic research on the subject, our students would also learn more, graduate at higher rates, and achieve greater success in college or careers.

To say that these initiatives aren’t gigantic or revolutionary is not to say they lack powerful opposition. Each proposal threatens one or more vested interests by giving average North Carolinians more power to make their own decisions and pursue their own dreams. Naturally, the affected special-interest groups will fight tooth and nail to protect their turf and preserve their favored position.

I’ve always appreciated this clause in Article 1 of the North Carolina Constitution: “Perpetuities and monopolies are contrary to the genius of a free state and shall not be allowed.” Let’s pivot back to that fundamental principle.

John Hood is chairman of the John Locke Foundation. Follow him @JohnHoodNC.