The term “fiscally responsible politicians” is usually an oxymoron. Most of the time, the easiest way to win an election is to promise more government programs, more spending, more cronyism, and more … stuff. And all those promises lead to bigger state budgets and bigger tax burdens on taxpayers.

For years, this dynamic played out in North Carolina in the form of high taxes, corporate handouts, and all-around uncompetitive economic policies.

In 2013 however, more fiscally responsible leaders came into the majority at the statehouse and began implementing tax cuts for North Carolinians. Then in 2021, state leaders passed the First in Freedom Budget which continued the state’s positive fiscal trajectory and instituted major reforms to state government.

The First in Freedom Budget is a watershed moment for the Tar Heel State, and it was made possible by the John Locke Foundation’s incredible campaign to ensure its passage.

Laying the groundwork for reforms

Prior to 2013, the Tax Foundation ranked North Carolina among the worst in the country in terms of tax competitiveness. Tax cuts enacted over the last decade have improved that outlook, but the reforms weren’t complete. And to add insult to injury, North Carolinians were without a new state budget ever since Gov. Roy Cooper took office in 2017, as he vetoed every previous proposal that made it to his desk.

For over three decades, the John Locke Foundation has been fighting for responsible spending, balanced state budgets, good government reforms, and free-market solutions to inefficient government. That experience has taught the John Locke team the importance of laying the right groundwork for policy wins. So in 2020, in anticipation of the First in Freedom Budget showdown, John Locke’s team published Big Government, Big Price Tag, which lawmakers used during the 2021 long session to inform their approach to restraining spending. Then in August 2021, John Locke Foundation published the report A Culture of Personalized Learning showing how education savings accounts allow parents to make more sophisticated and diverse decisions about their child’s education. John Locke experts like Senior Vice President of Research, Brian Balfour, showed legislators and taxpayers the real benefits of repealing the corporate income tax and lowering the personal income tax.

John Locke’s government affairs team also worked around the clock to educate legislators on all the innovative budget solutions contained in the First in Freedom Budget.

And finally, as the budget showdown loomed large, John Locke’s marketing team ran an aggressive, targeted digital campaign exposing Gov. Cooper’s corporate tax hypocrisy. In 2021, the governor pushed for $875 million of taxpayer-funded incentives (a.k.a. corporate handouts) to Apple while repeatedly rejecting calls to eliminate the state’s corporate income tax. In total the digital campaign reached over 100,000 North Carolinians and generated over 1,000 comments and hundreds of shares.

Winning results for North Carolinians

At the end of the day, policy campaigns are only as good as the results they deliver to taxpayers. By this metric, John Locke Foundation’s campaign paid off.

The state legislature passed and the governor signed the First in Freedom Budget into law. This budget will bring real tax relief and government reforms to the people of North Carolina. Some of the biggest victories of the budget include:

• Reducing the flat personal income tax rate from 5.25% to 3.99% by 2026.
• Increasing the standard tax deduction.
• Phasing out the state corporate income tax by 2029.
• Holding the line against Medicaid expansion, despite pressure from Gov. Cooper.
• No new debt.
• Expanding the Opportunity Scholarship Program and Education Savings Accounts (ESA) by a combined $22 million.
• Reforming the Emergency Management Act to limit a governor’s ability to unilaterally and indefinitely declare a state of emergency.

“North Carolina families will now be able to keep more money in their pockets and business owners will be able to make their bottom lines more confidently,” said John Locke Foundation Executive Officer Amy O. Cooke. “North Carolinians will no longer have to face never-ending states of emergency and abuses of executive authority, and Locke was a major driver of that change.”

Each major aspect of the First in Freedom Budget represents a historic victory that will improve the lives of North Carolinians for years to come. And while winning victories for taxpayers is the payoff that SPN partner organizations work for, the team at John Locke Foundation also celebrated a much-deserved victory when they won the SPN Bob Williams Award for Biggest Home State Win for their campaign to pass the First in Freedom Budget.

Convincing state leaders to pass responsible and sustainable budgets is often easier said than done. But fortunately, North Carolinians have the (award-winning) team at John Locke Foundation to ensure that truly sensible budgets and real tax reform are here to stay in the Tar Heel State.