Raleigh, N.C. - Governor Pat McCrory and North Carolina's latest AAA bond rating were recently featured in Forbes magazine. 
Give North Carolina More Credit For Its AAA Bond Rating
Rex Sinquefield
Forbes
February 16, 2016

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%. Because of McCrory’s reform package, the state now levies a flat 5.75% income tax, and in 2017 that rate will drop to 5.5%.

Eastern states with high income taxes are losing money to North Carolina. Ohio saw $1.89 billion in net adjusted gross income go to North Carolina between 1992 and 2014; during that same timeframe, Pennsylvania lost $2.23 billion to the Tar Heel State. North Carolina’s prospects, on the other hand, just continue to brighten. Between the time Governor McCrory took office in 2013 and now, North Carolina has seen the net creation of more than 260,000 private-sector jobs. What’s more, the governor’s reform-minded actions allowed the state to pay off a $2.8 billion unemployment insurance debt to the federal government (five years ahead of schedule, no less) and increase North Carolina’s rainy-day fund by more than $1 billion.

In the coming years, we should expect to see North Carolina emerge victorious when it competes for business and residents with higher-income-tax states. Writing for the Philadelphia Inquirer opinion page, Patrick Gleason of Americans for Tax Reform warns that “[in] North Carolina, Republican Governor Pat McCrory and state legislators have positioned the Tar Heel State to blow Pennsylvania away in the competition for new business, investment, and residents by significantly reducing and flattening personal and corporate income tax rates.”

Clearly, Governor McCrory remains laser-focused on not only improving North Carolina’s economy, but making the state highly competitive on the national stage. The three largest bond-rating agencies took notice. Governors of more sluggish states should consider the North Carolina success story a wakeup call.

Read more here (link is external).