When North Carolina voters in 17 counties cast their ballots this year, they had the option of voting “yes” or “no” for proposed increases in local sales or property taxes. In effect, however, voters in all 100 counties got their say on tax policy. The message most sent was unmistakable: don’t raise taxes.
First things first. There were 17 tax-hike referenda on county ballots. In 14 counties — Bladen, Carteret, Clay, Cleveland, Graham, Henderson, Jones, Mitchell, Pasquotank, Rockingham, Rutherford, Stanly, Stokes, and Swain — voters were asked to raise the sales tax by a quarter-point. In all 14 counties, voters said no, often by large margins. In Gates County, voters also said no to a supplemental property tax for school construction.
In the final two cases, the trend went the other way. In Halifax County, voters approved a supplemental property tax for schools. And in Wake County, voters approved a half-cent hike in the sales tax for public transportation. But neither margin was overwhelming. In fact, in populous and Democratic-trending Wake — where 57 percent opted for Hillary Clinton and 60 percent picked Roy Cooper — the transit tax passed with only 53 percent of the vote.
Speaking of Clinton and Cooper, taxes weren’t just on the ballot as a collection of county referenda. The races for president, governor, lieutenant governor, U.S. Senate, and state legislature all featured lots of advertising, debate, and media coverage about the issue. The tax plans of Clinton and Donald Trump contrasted sharply. Deborah Ross’ long record of voting for higher taxes in the General Assembly became a flashpoint in her race with Richard Burr. In dozens of state house and senate races, Democratic challengers attacked Republican incumbents for slashing taxes too much over the last six years, and promised to rescind at least some of the tax cuts to pay for more state spending on education, health care, or unemployment benefits.
In the vast majority of contested races, North Carolinians opted for the candidate least likely to raise their taxes, or mostly likely to cut them.
But what about Cooper? He significantly outpolled most of the Democratic ticket, essentially tying with Pat McCrory in the race for governor despite the general Republican tilt of the election. Does that constitute a contrary signal about public opinion on taxes?
No, and this is an important point. Roy Cooper did not promise to rescind any of McCrory’s cuts in personal, corporate, or payroll taxes. Indeed, he pointedly refused to endorse any increase in state tax rates, even when asked repeatedly about the question by debate moderators and reporters. If he had, I would submit, Cooper would have lost lots of votes from among the suburban and rural voters who split their tickets between him and GOP candidates for other offices.
Fiscal liberals often accuse fiscal conservatives of an unjustified fixation on the tax issue. They are mistaken. Elections are about bestowing the government’s coercive power to tax, spend, and regulate on particular leaders. At stake are the core questions of how much to use those powers, and to what ends.
Since 2010, state Republicans have chosen to shrink the size and scope of government. They’ve cut taxes by billions of dollars. They’ve kept budget growth at a modest, steady pace, which has had the effect of reducing the size of state government relative to the state’s economy to a projected 5 percent of gross domestic product next year, down from an average of about 6 percent of GDP when Democrats ran the legislature. At roughly the same time, Republicans won control of most of North Carolina’s county commissions and put a similar check on local taxes and spending.
In 2016, voters had ample opportunity to weigh in on these developments. They defeated almost all of the tax hikes on the ballot. And when there was a clear contrast between the candidates on taxes and spending, the fiscal conservatives usually won.
Of course, North Carolinians believe in spending money on core services. But most favor doing so by setting priorities, not raising taxes.
John Hood is chairman of the John Locke Foundation, a North Carolina think tank, and appears on the talk show “NC SPIN.”