Government Overspending Helps Slow N.C. Economic Recovery

Unemployment drops to 9.8 percent, but state still loses jobs

RALEIGH (Carolina Journal Online) - A state government that relies on federal bailouts, temporary tax hikes, and other gimmicks to pay as much as one-third of its bills fails to set the stage for strong economic growth in North Carolina. The John Locke Foundation's top budget expert offers that analysis as he reviews new state unemployment data.

"We'll see healthy job growth in North Carolina when more business owners and entrepreneurs are convinced they can hire workers without fear of massive tax hikes and other job-killing policies in the months ahead," said Joseph Coletti, JLF Director of Health and Fiscal Policy Studies. "Right now, North Carolina leaders are not taking the steps that would put those entrepreneurs' minds at ease."

The prospect of a tax hike next year is clear to any observer who looks at North Carolina's state budget picture, Coletti said. "No one can dispute that lawmakers have dug themselves a hole of at least $3.3 billion for the next budget year," he said. "How? They relied on federal stimulus money, so-called 'temporary' tax increases, and other one-time changes to cover that much of the state budget."