Politics & Government
6:39 am
Tue February 19, 2013

State Of The State: McCrory Calls For Tax And Education Changes

Gov. Pat McCrory
Gov. Pat McCrory focused on the economy, education and tax reform in Monday night's State of the State address.
Credit Governor's Office

Republican Governor Pat McCrory delivered his first State of the State speech to North Carolinians Monday night. He promised to make state government more efficient through a series of cost-cutting measures.  He also pledged to improve North Carolina's economy and its educational system.

Governor McCrory gave his speech before a joint session of state lawmakers at the General Assembly. He started by thanking his newly formed cabinet and former Governor Jim Martin, who was in the audience, but then McCrory quickly moved on to the topic of making North Carolina better. He says it's time to take action to get the economy moving again, and that includes signing House Bill 4, a measure that would accelerate paying off a loan owed to the federal government.  

"Borrowing from Washington with no idea or plan on how to pay for it ends with this administration right now. We are not going to do it any longer. We are not going to do it any longer," McCrory said. 

"We are not going to borrow money from Washington with no idea of how to pay it back."

Business owners had already been helping to pay off that loan with an increase of $21 per worker per year into North Carolina's unemployment fund. The state had borrowed the money to finance an unexpected surge in unemployment benefits brought on by the recession. The bill would also reduce benefits for unemployed workers and shorten their duration. Governor McCrory then asked lawmakers for their patience as staffers work to trim costs in the state's Medicaid program.  He warned he's keeping an eye on state employees.

"We are also requesting legislation to address state personnel and productivity issues," McCrory said. 

"This is a very serious issue for our cabinet and for other people in the cabinet of state who've communicated this issue to me. We want to reward our talented state employees but seat warmers must be a thing of the past."

The governor also touched on tax reform without saying exactly what kind of a plan he'd support. An idea floated last month by Republican Senate leaders recommended abolishing personal and corporate state income taxes and raising the sales tax. Governor McCrory didn't elaborate whether he supported that or not, but he said the state's image needs to be updated.

"We're going to develop a long term strategic plan that updates our brand and what puts us on a path to success first is to fix and modernize our tax system in North Carolina. We've gotta do it," he said.

In keeping with the speech's theme of cutting costs, the governor moved on to the topic of making education more efficient too. He said more attention should be paid to innovative educational methods, including digital learning. He says he'd like more of the administrative costs of the education lottery to be used for schools.

"I'm recommending that we pursue legislation to reallocate a portion of money away from the bloated and frankly annoying advertising and administration costs of the lottery commission, and we will use that money to help our students with technology," McCrory said.

The speech went over well with Republican lawmakers, who applauded enthusiastically after Governor McCrory's key points, but Democrats, who are in the minority, were less enthused. In an official response, House Minority Leader Larry Hall said the state should work harder to make the tax code fair for working families. Democrat Josh Stein, the Minority Whip in the Senate, said it was hard to tell just what the governor will do about a number of larger policy issues.

"I think it's most notable not by what he said, it's more notable as to the lack of detail he put behind any of the policy prescriptions he offered," Stein said.

Stein and other Democrats say two bills the governor supports would do more harm than good to the state's economy. One is a measure that blocks the state from expanding its Medicaid program to 500,000 uninsured residents. The other is the bill that would limit benefits for unemployed workers. Governor McCrory says he intends to sign that bill into law today.

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