It may be hard to believe, but Republicans and Democrats in North Carolina have managed to agree on something. Public educators are in need of pay raises. In December 2013 year, Lt. Gov. Dan Forest joined the push with the bold directive to make North Carolina teachers the best compensated nationwide, without putting an added burden on taxpayers.
This laudable goal is sure to be met with approval from Republican and Democrat voters statewide. One doesn’t have to be an expert political analyst to see why. The public sees K-12 education as an engine of economic growth. It’s too bad the Lt. Governor’s party has been weakening this institution for years—and it is all too natural that the GOP is clamoring for education investment amidst midterm elections.
Republicans have battered public education since taking control of the General Assembly in 2010, but the real pummeling happened after Gov. Pat McCrory’s election. With a fellow partisan in the Capitol, the General Assembly proceeded to dismantle what was considered a bright spot for education in the South.
Legislators have eliminated teacher tenure and pay increases for those with graduate degrees, although research shows that teachers with higher degrees produce better students.
The GOP-controlled legislature created a loophole that allows tax dollars to channel to private schools while cutting budgets for public schools. It asked schools to do more with less and piled on standardized tests, questionable indicators of performance. Finally, it ignored widespread protests for raises—most North Carolina teachers haven’t seen an increase in nearly a decade. The result has been referred to as a teacher exodus to surrounding states.
The GOP doesn’t see education as economics—figures like Budget Director Art Pope and U.S. Senate candidate Thom Tillis insist that so-called economic development programs better encourage growth.
A closer look reveals that these claims are wrongheaded. Both tax credit and discretionary programs are unpredictable and unmanageable. In early 2013 McCrory announced a discretionary grant award to MetLife, the world’s largest insurer. MetLife agreed to bring about 2,600 jobs to Cary and Charlotte for about an $85 billion award from the state.
A Google search found a presentation to a legislative committee that stated MetLife’s Job Development Investment Grant award totaled more than $125 million across 12 years, though that fund has an annual liability cap of $15 million. That’s about $10 million a year, leaving less than $5 million to fund other awards. The program is stretched too thin. Such grants are also unpredictable—similar deals with Google and Dell fell through at state expense.
North Carolina also offers tax credits to companies for activities like hiring or investing in property. But a study from the UNC Center for Competitive Economies stated tax credits are ineffective. No CEO sits in an office and makes decisions based on obscure tax credits and statutes.
Public data for these credits is spotty, raising questions of accountability and integrity. The Office of the State Auditor issued a report stating the most popular discretionary fund tapped by governors—JDIG—is overextended and mismanaged. The report was issued July 2013, yet the General Assembly remains silent about the issue.
The state government is having trouble putting one foot in front of the other. North Carolina shouldn’t pursue big investment deals with top rate companies without funding an education that can provide adequate employees. As education declines, so will the rate of business investment in the economy—and more CEOs will be leaving North Carolina governors at the economic altar.
When it comes to development, the rule of thumb for state governments should be to earn interest on the human capital first. Last year, telecommunications and information technology grew in North Carolina by a rate of more than 12 percent. Instead of funneling $80 billion into science, technology and math education in North Carolina schools, the governor spent that cash on bringing just 2,600 jobs to Wake and Mecklenburg counties—places that, frankly, are the most affluent, educated and employed in the state. If the McCrory administration wants to get serious about the economy, it needs to get serious about education. North Carolina schools sure could use about $80 billion right now.
