Capital Goods: September 2012

Tide is turning in Tar Heel politics 

When Gov. Beverly Perdue spoke to some of the state’s top business leaders at the North Carolina Chamber’s annual meeting in March, she should have been at ease. After all, she’s cut from the same cloth as the pro-business Democrats — think former Gov. Jim Hunt or recently retired Senate leader Marc Basnight — who have dominated state government for decades, with their political fortunes intertwined and intermingled with the economic ones of so many of the interests represented in that room.

But Perdue appeared anything but comfortable. At times, she chided her audience, questioning its commitment to improving education to produce a strong workforce. At times, she seemed hesitant and unsure what to say. Her performance might be dismissed as that of a politician shaken by declining approval ratings, so shaken that she had decided two months earlier not to seek a second term. I saw it as something else: another sign of how the tide has turned — particularly among the movers and shakers who are major campaign donors — in North Carolina politics.

That shift is shaping the race to replace Perdue. You can hear it in the rhetoric. You can see — and count — it in the money. Former Charlotte Mayor Pat McCrory, the Republican candidate, has raised more than twice that of Lt. Gov. Walter Dalton, his Democratic opponent. Yes, he got a head start. He has basically been running for governor since he lost to Perdue in 2008. Dalton only entered the race after learning she wouldn’t run (though he was already raising money for the less-expensive race for lieutenant governor). Even so, during the April 21- June 30 reporting period, McCrory raised $2.2 million, compared with Dalton’s $1 million.

Some might explain away those numbers as simply McCrory’s access to the Charlotte business community’s deep pockets. But didn’t he have those same ties four years ago, when Perdue was the one cleaning up in the money chase? A better explanation is that money follows power. McCrory benefits from being the front-runner — even when folks figured he was going up against an incumbent — and from the fact that Republicans, with their control of the legislature, hold power in Raleigh. What Carter Wrenn, the longtime campaign aide to Jesse Helms, calls the “easy money” — contributions from those seeking access to power — mostly has slipped away from Dalton and his fellow Democrats in the legislature.

That’s not the only thing that has changed. As Perdue pointed out in March, some now doubt the long-held belief, shared by both political and business leaders, that improving public education is key to improving the state’s standing. GOP legislative leaders have been dismissive of efforts the Democrats made to improve schools. They have embraced alternatives to public education and may well embrace more, including voucherlike programs. They’ve done so with no interference from groups such as the Chamber, which once championed Hunt’s programs. Then again, back in those days, the Chamber raised little fuss when Democrats responded to economic downturns and decreased tax revenue with tax increases.

McCrory has echoed his party’s legislative leaders, arguing that there is something broken in state government and state policy. The result: North Carolina is losing its luster when it comes to business growth and job creation. One of the things that needs fixing most, he argues, is an archaic tax structure that makes the state’s corporate- and personal-income taxes among the highest in the Southeast. He has talked about revamping the tax code to look more like Florida’s or Tennessee’s. Neither taxes most forms of personal income.

Though he’s from the foothills rather than eastern North Carolina, Dalton’s political philosophy isn’t much different than Hunt’s, Basnight’s or Perdue’s. If the state is losing business to its neighbors, he says, it’s because the Republican-controlled legislature has made ill-advised cuts to education and economic-development initiatives. Not so long ago, that kind of talk would have attracted the support of big-business honchos. These days, a different piper is playing a different tune. Whether it’s because they like the piper, his power or his tune, many who once chased after another have chosen to follow.

Scott Mooneyham is editor of The Insider, www.ncinsider.com. Email him at smooneyh@ncinsider.com.