The truth behind 10 myths about North Carolina

by Rob Christensen, News and Observer, September 8, 2013.

There are a lot of myths about North Carolina’s government. Some of them have an element of truth to them, but often they are based on misconceptions. Here is my take on 10 myths.

Myth No. 1: North Carolina’s public schools are failing its children.

Not according to international testing. The 2011 Trends in International Mathematic and Science Study tested fourth and eighth graders from 60 countries. North Carolina’s children did better than the U.S. national average. They also scored better than the students in such countries as Australia, Israel, Sweden, Italy and Norway.

Myth No. 2: North Carolina’s state government was in a financial mess until the recent change in party control.

Not according to Wall Street. North Carolina was – and continues to be – one of nine states with AAA bond ratings as awarded by Standard & Poor’s, Moody’s Investors Service and Fitch Ratings. The ratings reflect fiscal strength and prudent management and are analogous to credit ratings of individuals. North Carolina, like most states, did have a large budget shortfall during the deep recession, which it dealt with by budget cuts, salary freezes and other economic measures.

Myth No. 3: Until recently, state government was on a spending spree.

Not according to the conservative-leaning Tax Foundation. Between 2001-2011, North Carolina state government spending per capita grew 18.3 percent, making it the 45th fastest-growing state government in the country, according to the Tax Foundation. (The foundation measured growth in real dollars per capita to eliminate the effects of population growth and inflation.) The highest growth rate in the nation was Louisiana, which grew 63.6 percent, and the lowest growth in government spending was Alaska, which grew at 8.9 percent. North Carolina’s general fund grew in unadjusted dollars from $14.3 billion in 2001-2002 to $19.8 billion in 2011-12.

Myth No. 4: N.C. spending on public education is at an all-time high.

Actually, spending for secondary and elementary schools is less than it was five years ago, despite an increase in enrollment. The legislature appropriated $7.8 billion for the public schools this summer, less than the $7.9 billion than was appropriated during the 2008-2009 school year. The legislature did increase school spending $361 million over the previous year. Because of the recession, school spending was cut back several years, going from $7.9 billion in 2008-09 to $7.4 billion in 2009-10, to $7 billion in 2010-11, to $7.5 billion 2012-13, according to state budget documents.

Myth No. 5: North Carolina was a high-tax state before the recent tax cuts.

The state and local tax burden for North Carolina in fiscal year 2010 was 9.9 percent, exactly the national average, according to the Tax Foundation. (State and local taxes have to be counted together because public services, such as schools, are financed by different levels of government in each state.)

Because it was surrounded by low-tax states, North Carolina looked higher. In the South, only Arkansas had higher taxes. North Carolina’s tax burden has remained fairly steady over the years: 9.7 percent in 1977, 9.2 percent in 1980, 9.6 percent in 1990, 9.2 percent 2000, 9.7 percent in 2005, 10 percent in 2007.

Myth No. 6: North Carolina high schools have a dropout problem.

Any students who drop out are a problem. But the four-year high school graduation rate is now at 82.5 percent, the highest graduation rate in state history. It has risen from 68.3 percent since 2006. The national graduation rate stood at 78.2 percent in 2010, the last year statistics were available. North Carolina had the fourth highest percentage improvement in high school graduation rate between the years 2001-2012 of any state in the country, according a report by the National Education Association.

Myth No. 7: North Carolina was no longer an attractive state because of high taxes.

Not according to the moving companies. The 2012 United Van Lines Migration Study found that North Carolina was the fourth highest destination for moves, following the District of Columbia, Oregon and Nevada. North Carolina has been growing at twice the national average. During the first decade of this century, only the states of Nevada and Texas grew faster than North Carolina, according to the U.S. Census Bureau.

Myth No. 8: North Carolina is in hard times.

This is true. North Carolina’s unemployment rate of 8.9 percent is tied with Rhode Island for the third highest in the country. Only Illinois and Nevada have worst rates. But the unemployment rate topped out at 10.7 percent in September 2011 during the recession and has been slowly coming down ever since. There are signs that North Carolina’s economy is picking up. Last year, the state’s real gross domestic product grew by 2.7 percent, second only to Tennessee in the Southeast.

Myth No. 9: N.C. teachers were never well paid.

Tar Heel teachers almost always trailed the national average, although they were as high as 25th in the country as late as 2008-09 school year. The recession was tough on teachers nearly everywhere, with their salaries declining in 32 states, according a report prepared by the National Education Association. But North Carolina teacher salaries have plunged more than those in any other state, a real decrease of 15.7 percent, the NEA report said. North Carolina beat out Indiana for the biggest loss in teacher wages. The state now ranks 46th in teacher salaries.

Myth No. 10: North Carolina has an anti-business climate.

Like beauty, business climates are apparently in the eye of the beholder. But for a state with a supposedly anti-business climate, there are a lot of people who seem to think otherwise. North Carolina was ranked as having “the top business climate” in the country displacing Texas in 2012 according to Site Selection, the magazine of corporate real estate strategy and economic development. North Carolina ranked as the third best state for business by Chief Executive magazine in 2013 behind Texas and Florida.

Forbes and CNBC both ranked North Carolina as the fourth best state for business in 2012. And the state ranked 44th in tax climate for business by the Tax Foundation.