Dueling Budgets in the Carolinas


Posted by Chris Buki, Joseph Shanahan on Wednesday, July 11th, 2012, 4:44 PM PERMALINK


This summer has seen a fair amount of state budget wrangling in the Carolinas, which has put the pronounced differences in the policies being put forth by SC Gov. Nikki Haley and NC Gov. Bev Perdue on full display.

After a week-long state budget stand-off between the NC Legislature and Democratic Governor Bev Perdue, the Legislature gathered enough votes last week for a bi-partisan override of Gov. Perdue’s budget veto for the 2nd year in a row. Perdue’s veto came as the result of her insistence on a sales tax increase.

Another pro-growth piece of legislation that the North Carolina Legislature approved despite Gov. Perdue’s veto was a bill to permit hydraulic fracturing and drilling within the state. With North Carolina’s 9.7 percent unemployment rate (the 4th worst in the nation), Gov. Perdue needlessly attempted to derail job-creating legislation in the Tar Heel State by vetoing this bill to throw a bone to far-left special interests.

This political pandering by Perdue is in stark contrast to her counterpart to the South, Governor Nikki Haley.

Governor Haley has aggressively championed and pursued pro-growth reforms and policy initiatives that will attract employers to South Carolina and make it a more competitive state to do business and create jobs in the process. Where as Perdue and her would be successor, Walter Dalton, are dead set on raising taxes, Gov. Haley is taking South Carolina in the opposite direction.  Most recently, Gov. Haley signed into law a continuing resolution (H. 5418) that would lower the income tax rate for small businesses from 5% to 3% over the next three years. This amounts to $20 million per year in tax relief for the engines of job creation in the Palmetto State- small businesses. By contrast, Gov. Perdue vetoed small business tax relief passed by North Carolina legislators. Gov. Haley has issued line item vetoes that eliminate over $67 million dollars of wasteful spending in South Carolina’s budget.

Tax relief such as this represents an important first step in the right direction for small businesses who are struggling under the burden of over-regulation and over-taxation advanced by the Obama administration. In addition, South Carolina’s budget also puts aside $100 million into a reserve fund, instead of spending more on government expansion. Governor Haley’s achievements are an excellent first step toward comprehensive pro-growth tax reform. They are especially noteworthy when contrasted with the efforts of her counterparts in the North, Bev Perdue, and the man hoping to replace her, Lt. Gov. Walter Dalton, who have both come out in support of a sales tax hike.

This November’s gubernatorial election in North Carolina will decide whether North Carolina will continue the tax-and-spend approach of Barack Obama, Bev Perdue and Walter Dalton, which has made the state less competitive regionally and globally, or whether the state will make an attempt to keep up with its neighbors who are improving their business tax climates, such as South Carolina, Virginia and Tennessee. 

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