Should politicians focus on culture wars or jobs?
“The business climate is amazing,” marvels Chris Epstein, a property developer in Charlotte, North Carolina. Officials are either helpful or stay out of the way. And the living is sweet: drivers don’t honk, neighbours are kind and deals are often sealed with a handshake. “It’s like living in a loaf of Wonder Bread,” he chuckles.
North Carolina has long enjoyed a reputation as an easy-going, business-friendly state. Warm weather, fine universities and a low cost of living attract lots of migrants: its population grew 18.5% between 2000 and 2010, compared with 9.7% for America overall. Yet the recession cost North Carolina around 340,000 jobs, not all of which have come back. The state tries hard to recruit new businesses, but faces stiff competition from neighbouring South Carolina, Tennessee and Virginia.
When Pat McCrory (pictured) campaigned for governor in 2012, North Carolina was eager for new blood. Twenty years of Democrats in the governor’s mansion had led to tax hikes, government bloat and allegations of impropriety. Mr McCrory, a Republican former mayor of Charlotte, promised to create jobs, shrink the state’s debt and improve North Carolina’s “brand.” He won the election handily.
To appeal to businesses, the new governor swiftly began trimming regulations and expanding vocational training in high schools. He introduced a modified flat tax, which cuts personal rates up to two percentage points to 5.8%, and cuts corporate tax rates to as low as 3% by 2017. Critics carp that a flat tax shifts the burden to poorer people, particularly as the changes–which took effect in January–include a rise in some sales taxes and a repeal of the Earned Income Tax Credit, which pads the wages of the working poor.
The reforms will also reduce tax revenues by $US2.4 billion over the next five years, according to the state’s Fiscal Research Division. Mr McCrory disputes this: “If I get more people to work we’ll have more money,” he says.
From a peak of 11.3% in January 2010, the state’s unemployment rate fell to 6.7% in January this year. Conservatives crow that cuts to jobless benefits have spurred people to find work. North Carolina has added a net 70,000 jobs since last January, according to the state’s Division of Employment Security, and the national recovery is starting to buoy the state’s manufacturers.
However, the jobless rate has also fallen because many people have given up looking, and so are no longer counted.
After a year in office, the governor’s approval rating is around 40%, with 47% of voters disapproving of the job he is doing, according to Public Policy Polling (PPP), a firm based in Raleigh.
He has been hurt by some ineptitude at the Department of Health and Human Services, which has bungled programmes for Medicaid and food stamps. And he has been struggling to manage a crisis with Duke Energy, the state’s main electricity supplier, which spilled around 35m gallons of toxic coal ash into the Dan River earlier this year, threatening drinking water and aquatic life. Given Mr McCrory’s push to cut red tape, the timing is awkward. It hardly helps that he worked at Duke Energy for 29 years.
A bigger problem for him is that he has come to be seen as a figurehead for an increasingly unpopular state legislature. The 2010 election gave the Republicans enough seats to control the redistricting process, and in 2012 they took full charge of North Carolina’s state government for the first time in a century. The party now enjoys a veto-proof “super-majority” in the General Assembly, which means they can basically pass whatever laws they want.
Unlike the pragmatic conservatives who have long dominated state politics, the Republicans now in charge are culture warriors. Their priorities ensured that Mr McCrory’s first year in office was contentious. The governor found himself signing laws to ban sharia (Islamic law), restrict abortion and introduce strict voter-identification rules, which are being challenged by the federal government.
Public approval for the General Assembly has fallen to 17%, according to PPP. Some worry that a lack of discipline among hardline Republicans will hurt the state’s reputation for moderation. The lurch to the right has provoked protests from a progressive “Moral Monday” movement, led by local pastors, which had its largest-ever rally in Raleigh in February. Unaffiliated voters have become the fastest-growing electoral group in the state, and they are likely to outnumber registered Republicans in most counties by 2016, say Morgan Jackson and Paul Shumaker, two political consultants.
The governor is no ideologue. “Listen, I’ve stepped on toes of both liberals and conservatives,” he insists. Yet Mr McCrory seems unable to rein in his party and frustrate unpopular laws. The legislature’s power to override his veto can leave him looking foolish, as he did when two vetoes were quashed last year.
Several Democratic candidates have already announced that they will be running for governor in 2016. “They smell blood in the water,” says Rob Christensen, a columnist at the News and Observer, a local paper. State lawmakers in safe seats can afford to be out of touch with the electorate. Governors are not so lucky.
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