Last week, North Carolina Governor Pat McCrory delivered the banner news that his state upheld its AAA bond rating – the highest rating possible – from all three major bond-rating agencies. North Carolina’s stellar standing owes much to Governor McCrory’s leadership. Unwilling to send the Tar Heel State down the same tax-and-spend death spiral that plagues too many other states, the North Carolina governor developed a strong approach toward tax reform – and stuck to it.
Bond-rating giant Moody’s credits North Carolina’s AAA rating to “the state’s long history of conservative fiscal practices, an economy that continues to recover and expand, and declining debt levels.” In a similarly glowing statement, Standard & Poor’s writes that North Carolina’s “favorable” economic climate has “helped spurs strong domestic in-migration, which has been good for population and economic growth.”
North Carolina’s success should provide an object lesson to any state wondering how to keep its workers and attract new businesses. Understanding that when we place a high price on work, we get less of it, McCrory in 2013 took decisive action toward the North Carolina state income tax. Until McCrory took office, North Carolina had the highest income tax in the American Southeast, with a growth-killing top rate of 7.75 percent. Because of McCrory’s reform package, the state now levies a flat 5.75 percent income tax, and in 2017 that rate will drop to 5.5 percent.