North Carolina as the new Wisconsin

By Grover Norquist and Patrick Gleason, Reuters, July 12, 2013.

North Carolina, a state traditionally associated with Southern hospitality, college basketball and barbeque, is bucking its genteel reputation this summer as state politics reach fever pitch.

“Nowhere is the battle between liberal and conservative visions of government fiercer,” wrote David Graham of The Atlantic, “than North Carolina.” NBC Political Director Chuck Todd cited Graham’s piece as “a good argument that the best — and most important — political story that no one has probably heard about is taking place in North Carolina.”

Since April, Democrats and liberal groups upset with the state Republicans’ conservative legislation have gathered every Monday at the capitol in Raleigh — with more than 600 demonstrators arrested so far. A state Senate bill passed last week designed to increase health and safety standards at women’s reproductive rights facilities added fuel to the fire. Public protests escalated and the state garnered even more national media attention.

Heated rhetoric aside, however, close examination shows a vocal minority is overreacting to Republicans implementing the fiscal policies they ran on — and that a majority of voters agreed were needed to make the state economically competitive.

Take tax reform, the issue that has been the top item on the docket this year — and drawn the most ire from Democrats. North Carolina has the highest income tax and unemployment rates in the South. This is no coincidence.

North Carolina’s punitive tax rates put the state at a competitive disadvantage in attracting employers and investors. Small businesses, responsible for a majority of job creation, are also held back due to the onerous tax code.

Republican Governor Pat McCrory and legislative Republicans campaigned on cutting the state income tax. The state Senate last week passed a bill to lower and flatten the income tax, and the state House approved similar legislation last month. Lawmakers and budget officials are now developing a compromise bill and McCrory recently announced they are close to a deal.

If Republicans are successful, North Carolina lawmakers will leave for summer break having delivered on one of their top campaign promises.

As North Carolina legislators work to finalize a historic tax reform package and budget, however, outside groups continue to ramp up the Monday protests. Graham, as well as other national commentators on both right and left, have compared them to the Madison, Wisconsin, protest rallies against Republican Governor Scott Walker’s labor reforms in 2011.

North Carolina Republicans should only hope their situation plays out similarly to what transpired in the Badger State.

Since Walker signed these reforms, the state’s unemployment rate has dropped from 7.6 percent to 7 percent — below the national average. Walker has taken the $3.6 billion deficit that his Democratic predecessor left him and turned it into a $419 million surplus — thanks in no small part to the reforms that labor unions, MSNBC and liberal college students decried.

Two years later, it is clear that not only were Walker’s reforms good policy, they were good politics. Walker’s approval rating was at 43 percent by the time he signed the bill. But by May of this year, Walker’s approvals had risen to 51 percent, according to a Marquette University Poll.

Like Walker in Wisconsin, McCrory and the North Carolina state Republicans inherited a budgetary mess from their Democratic predecessors. Rather than raising taxes, and bleeding more revenue from the private sector, as was standard operating procedure under decades of Democratic rule, these Republicans changed course — putting spending in line with revenues. This is what North Carolina voters elected a new Republican majority to do.

Liberal pundits will try to portray what is happening in North Carolina as dysfunction. But it is the opposite. Washington politicians and political commentators bemoan the lack of compromise there. If they want to see what compromise looks like, however, they should watch Raleigh — where Republicans are now compromising on how much tax relief to provide and how best to cut government waste.

Lawmakers on Capitol Hill would be wise to take note.