The failure of Bergernomics [View all]

The state budget finally making its way through the General Assembly tells us something about Phil Berger: He has not changed his mind. This budget contains a further $2 billion dollars in corporate tax cuts coming on the heels of a decade in which our corporate tax was all but eliminated. Actually, this budget finishes the job. Berger and his compatriots in the legislature firmly believe that their policy revolution has been a huge success. The problem is that they are wrong.

To hear them tell it, before 2011 North Carolina was run by left-wingers. One influential conservative writer often contrasts “constructive conservatives” with what he ominously calls “the left.” We supposedly bore the burdens of high taxes and stifling regulations, a failing school system, and a government that did not appreciate the critical importance of a strong business climate. All of this is nonsense. In reality, North Carolina ranked forty-sixth in per-capita state spending growth between 2000-2010. We had a AAA bond rating and a top-ranked business climate. But none of those facts interest the ideologues who gained control of the General Assembly one decade ago.

Repudiating these imaginary failures, Republican legislators set about slashing state government. Their first budget cut the UNC system by 15-18% depending on the campus–a jab at academic excellence motivated by decades of pent-up resentment of the intellectual liberalism nurtured in Chapel Hill. In 2013, legislators passed, and feckless Governor Pat McCrory signed, a regressive tax cut package that transformed the revenue picture facing state government. The tax cuts cost state government billions of dollars in structural revenue flows, and McCrory, in his typically impotent and intellectually vacuous way, signed the bill despite his stated insistence that reform be revenue neutral.

Don’t take Pat McCrory seriously.

By the end of a decade of right-wing rule, North Carolina’s state government was smaller as a percentage of GDP than it had been in 50 years. State spending relative to the overall economy was 30% lower than the 50-year average, and even lower than the averages that prevailed before the Great Recession necessitated spending cuts. Republicans are very proud of this record. But let’s take a look at what it has meant for North Carolina’s economy.

Read more: https://www.politicsnc.com/the-failure-of-bergernomics/