Bipartisanship was key in North Carolina's top business climate ranking. Tax cuts were not
Published August 11, 2022
Wins in the various rankings of state business climates have caused partisan tug-of-wars in North Carolina. When the state scores highly under one party’s control, the ruling crowd trumpets vindication and the out-party waxes dismissive. But the truth is that North Carolina typically does well in these rankings, and neither party is being entirely honest when they marshal our success as a talking point.
This year, however, has seen a unusual triumph both in the magnitude of our success and and in the ecumenical acknowledgement of the its many progenitors. CNBC ranked North Carolina as the number-one business climate in the country. Although both parties predictably tried to make this triumph a piece of evidence for their agenda’s wisdom, there was less propagandizing than usual, and that reflected the greater comity that has overtaken Raleigh since the 2020 election.
That said, I have some points to make that are important if we are to avoid drawing dangerous conclusions from CNBC’s accolades. First a less-than-thorough glance could imply that this success means the legislature’s signature economic policies are paying off. This is simply not true. While CNBC credited us with strong economic growth, that is a trend dating entirely to our recovery from the pandemic, guided by Governor Cooper. When the GOP’s tax and regulatory policies were having their greatest effect, North Carolina’s economy grew much more slowly and lagged its neighbors. It’s significant that CNBC did not mention tax cuts or deregulation–at all.
Second, most of the strengths CNBC invoked in awarding us this honor developed well before GOP control, and often came from Democrats. CNBC prominently cited the state’s community college system as a key strength–a system created by Democratic Governor Terry Sanford and CUT 10% by Republican legislators. The news network also hailed our innovation economy, which has much to do with the success of Democratic-created Research Triangle Park (though there was a bit of homegrown innovation in the state’s pre-RTP economy, as Mac McCorkle has explained). Our prodigious supply of capital dates back at least 100 and possibly even 200 years, but the state’s strong showing in venture capital investment again has a lot to do with the tech economy created by progressive business and political leaders over 60 years ago. In other words, CNBC was impressed with our business climate to a great extent because of the legacy of investments made before right-wing Republicans took control of state government.
As stated before, North Carolina political leaders are right to share credit for the state’s number-one business-climate ranking. That includes Republicans as well as Democrats. But be on guard against insinuations that right-wing austerity economics played more than a marginal role in creating North Carolina’s business prowess. That strength dates back far before 2010, and owes to a political tradition quite different than the one supply-side ideologues would have you believe is a magical economic elixir.