RALEIGH – Governments at all levels seem to be filled with the kind of people who write up lengthy lists of “top priorities.” In other words, they don’t know how to set priorities.
For example, when asked what issues most need to be addressed to improve the economic competitiveness of a region, they might begin their response with the obvious – raise the skill level of the workforce, improve transportation access, or reform the regulatory process – but then they hasten to remind us not to forget the economic-development implications of bike paths, arts facilities, sports stadiums, and flashy advertising.
To resist setting priorities and sticking to them is not a behavior unique to the public sector, of course. It is an element of human nature with which we all struggle from time to time. The difference is that in the private sector, in the competitive marketplace, a failure to set priorities often results in deleterious consequences. A company, spreading its capital across a range of investments, may lose out on the one big payoff its competitors receive. Or an employee who tries to do 10 things and produces mediocre results sees a colleague, who focused one big thing and got it done right, get a promotion.
If you ask the leaders of North Carolina’s largest and most influential businesses what the state’s priorities should be, you’ll get an earful. Or an eyeful, if you conduct your probe through mail surveys as the John Locke Foundation has now done in three of the past four years. Our latest statewide survey of more than 600 respondents, released in December, found once again that state and local taxes are the greatest impediment to North Carolina’s economic competitiveness, according to these executives. (The sample came from a mailing list that included business members of North Carolina Citizens for Business & Industry plus several other local chambers and trade associations.)
Asked to rank 10 factors according to their importance in competitiveness, the respondents gave taxes an average ranking of 2.49, with the regulatory burden (3.63), labor skills and availability (4), and the education system (4.16) filling out the top tier. The availability of corporate incentives came in at number five, but another question in the survey helped to tease out the business leaders’ priorities here: asked which single change in the tax code would best promote economic growth in North Carolina, 68 percent said across-the-board tax reductions while only 32 percent picked targeted tax incentives.
On spending, the JLF survey approaches budget priorities in a unique way. Respondents are asked to gauge the rate of return on state government’s investment of tax dollars in various state programs. The 2005 survey, as did previous ones in 2004 and 2002, found that a majority of business leaders attached the label “good” only to the state’s public universities (76 percent) and community colleges (70 percent). Bringing up the rear on this measure were K-12 schools (16 percent good, 47 percent fair, and 37 percent poor), Medicaid and welfare programs (18 percent, 50 percent, and 32 percent respectively), and business-recruitment programs (18 percent, 54 percent, and 28 percent).
Judging by several years worth of survey data, I think the conclusion is obvious that many of North Carolina’s leading business executives do not think the economic future of the state is predicated on setting 10 or 15 “top priorities.” They want policymakers to focus on tax, regulatory, and educational issues. Good.
Hood is president of the John Locke Foundation.