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McCrory calls for tax, education reform

Posted January 2, 2013

— Gov.-elect Pat McCrory warned North Carolina business leaders Wednesday that he will be stepping on their toes in the coming months as he pushes for reform in the state tax code.

Speaking to the annual economic forecast meeting of the North Carolina Chamber at the North Carolina Bankers Association, McCrory also said he plans to work toward a more efficient education system in the state, expand North Carolina's energy industry and build a long-term vision for highways, ports and other infrastructure.

"We have to recognize and admit that we have some problems," he said, citing the state unemployment rate and competitive imbalance. "Our brand of economic prosperity has been diminished."

Updating that brand will require restructuring the state's tax system, especially lowering the corporate and personal income tax rates, so that North Carolina can attract businesses and trained workers, McCrory said.

"Our tax system is no longer competitive with the rest of the United States and especially with our neighboring states," he said. "(Tax reform) is not going to be an easy battle or an easy solution."

Predicting swarms of lobbyists who will try to make exceptions for various industries during the reform effort, he asked business leaders to look at the state's long-term interest and not at their own tax pain.

"It's going to step on everyone's toes a little bit," he said. "I don't want to step on people's toes to cause pain. I want to step on people's toes to get them to stand up and recognize that we've got a problem and we've got to fix it."

Business leaders agree the tax system needs reform, but there's no real consensus on the best way to do it.

McCrory discusses NC's economic outlook McCrory discusses NC's economic outlook

"We've all known that for while," said Gary Salamido, vice president for government affairs at the N.C. Chamber. "I think it's proof that (McCrory has) been out in the community. He's been listening to folks. ... We think he's heard what our members have been telling him."

McCrory said he wants North Carolina to join with Virginia, South Carolina and Georgia to negotiate with the federal government on offshore natural gas and oil drilling. He also wants to put inland gas exploration on the fastest track possible to generate revenue and jobs for the state, as well as energy for the U.S.

"The downside right now is we've started very, very late, and now the gas price has gone very low," he said. "It's going to be a tough, competitive market to begin that process."

The public education system in the state needs to work seamlessly from pre-kindergarten through higher education to best use existing funds to educate and train students for the jobs that will be in demand in the future, McCrory said.

Likewise, the state needs a seamless infrastructure system, from highways to rail to airports to seaports. He said his new secretary of transportation will focus on building a 25-year plan that will help the state's economy and mobility.

"We're going to lead, but we're also going to listen, we're going to learn and we're going to communicate," he said. "In the end, we have to lead together."

McCrory: Rebuilding NC economy calls for shared sacrifice McCrory: Rebuilding NC economy calls for shared sacrifice

McCrory will be sworn into office on Saturday, and he said his first priority is repaying the $2.8 billion that North Carolina owes the federal government for unemployment benefits paid to laid-off workers during the height of the recession.

"You will be impacted – everyone will be impacted – but I'm convinced that, if we deal with it now, the cost won't be greater years down the road," he said. "You pay off the debt, and then you look at new policies so we don't get caught in this position again."

His other immediate concerns involve handling the provisions of the Affordable Care Act that will kick in over the next 12 to 18 months, such as building a system where people can shop for health coverage, deciding whether to expand the state's Medicaid program and working with businesses that are considering dropping their employee health plans.

"I don't think the people of North Carolina or the people of our country really understand the implications of the major changes that are going to be occurring with regard to health care," he said.

111 Comments

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  • signify6644 Jan 8, 10:22 a.m.

    Thank goodness. We need this type of common sense on national level as well.

  • goldenosprey Jan 4, 12:43 p.m.

    Rhess, you can rest assured if unemployment fails to improve in NC it will be "Obama's Fault." If it does go down then it will be "thanks to Pat's great leadership."

  • rhess2 Jan 4, 10:18 a.m.

    For those that think Governor Perdue ruined this State they truly don't understand how economics works in relation to the National and world economies. It is easy to blame the chief executive of a state for high unemployment and revenue deficits. In reality they have little to do with it when a nation is going through a severe recession. All they can do is react in order to keep their state afloat. In my opinion Gov. Perdue did the best she could given the economic conditions in both NC and rest of the Nation.

  • rhess2 Jan 4, 9:59 a.m.

    Governor-elect McCrory's ideas for tax reform in NC appears to do no more than toe the line of the Republican Party of lowering and/or not increasing tax rates. It is based on the 'trickle down" economic model that has failed time and time again. Making the assumption that if business pays out less money more jobs will be created is a hypothetical stretch. Also if consumers pay less taxes they will have more money in their pocket to spend is a stretch as well. The amount received is generally not enough to change consumers budgets. What McCrory doesn't seem to address is how he is going to raise revenue to lower the States deficit. He will need it in order to carry out his ambitious agenda.

  • happilynow Jan 3, 7:55 p.m.

    McCrory can save the tax payers a great deal of money by ending the constant and very expensive testing in grade K-12 in our public school.

  • IPayYouPay Jan 3, 3:44 p.m.

    As a very long time state employee, I can only dream about how many rolls of toilet paper I'm going to have to bring from home because no ordering is being done. Last year, we had to go without copy paper for about a month...I guess starting now, we're going to have to purchase that among other supplies just to get our work done. Wow...and I thought this was going to be hard. Weeeee, I can't wait!!!!!! not.

  • Lamborghini Mercy Jan 3, 12:47 p.m.

    Crumps Br0ther - But when the UE report comes out and its down .02% you are singing Barrys praises. its never enough is it?

    We'll for one I don't sing, and two, I'm smart enough to realize that President Obama has very little to do with North Carolina's unemployment rate. Now perhaps I should be asking you whether or not anything President Obama develops is good enough, because clearly you're quick to call his name when he wasn't the topic of discussion. Keep dreaming if you think fast food jobs and temporary jobs is key to restoring this economy.

  • weasel2 Jan 3, 11:54 a.m.

    Glad to see someone is finally going to start attracting businesses instead of driving them away. Gov McCrory may not get it all done but at least he is willing to try.

  • Crumps Br0ther Jan 3, 11:06 a.m.

    Yeah and that number should drop unemployment by what a whooping .02! And do you really think creating more restaurants is going to save this economy? Offshore drilling is temporary work and comes with serious consequences if corners are cut.
    Lamborghini Mercy

    But when the UE report comes out and its down .02% you are singing Barrys praises. its never enough is it? More money in peoples pockest has a ripple effect. And so now you are scared about corners being cut. Barry is in charge now and put the EPA on steroids, but I guess maybe we just shouldnt do anything at all, we dont any energy do we? C'mon you know deep down you want offshore drilling to happen, it will give you something to whine and cry about, and that gives you a sense of purpose

  • driverkid3 Jan 3, 10:35 a.m.

    You liberal perdue worshippers are a riot! You followed so close behind her that you could sniff her underarm deodorant, blind to everything she did to shame and ruin this state. Now, because there is not a lib in office, you are shaking in your boots with fear that all your comfortable little cushions are going to be snatched away from you.

    Bring it on, Gov. McCrory! Let's get some good changes in this state. One of them being a voter ID.

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