Republicans 'think jobs,' and a rural county waits for them

As Republicans’ historic two-year legislative session ends this week, the question of whether they fulfilled their pledge to boost the state’s economy remains debated, particularly in Edgecombe County, where the 13.7 percent unemployment rat

jfrank@newsobserver.comJune 28, 2012 

— Ask Lisa Moseley to describe the economy in this rural North Carolina town, and she’s quick with an answer. Without taking the cigarette from her lips, she spits a word not fit for print.

A moment later, her co-worker joins her outside the side door to Pat’s Salon and Spa for a smoke. Inside, the beauty shop’s chairs sit empty. Moseley asks her the same question. Same answer.

An hour’s drive west in Raleigh, the mood is much different. The leaders of the Republican-controlled state legislature use more positive descriptions for the state’s economic outlook. “Optimistic” is one favorite.

Republicans took power after the 2010 elections promising to improve the state’s lot with a mantra of “jobs, jobs, jobs.” It was their first term at the helm in more than a century.

As their two-year session ends this week, the question of whether Republicans fulfilled their pledge remains debatable. GOP leaders cite a litany of economic accomplishments. Balanced budgets. Regulatory reform. Business tax cuts. Energy exploration.

But tell this to the hairdressers who work in a county with the state’s fourth-highest unemployment rate, and it doesn’t register. In Edgecombe County, residents wait patiently for the tobacco and cotton crops but not jobs.

“Even though they are doing stuff, we aren’t seeing it here,” said a frustrated Michele Keel, 33, another hairdresser.

“It’s daily survival mode,” added Moseley, 45, as she burned through a second cigarette. “Now, going out to McDonald’s to eat off the dollar menu is a good day.”

House Speaker Thom Tillis recently said Republicans now “own the economy.” He pledged their policies will lead to more jobs over time, even though the national and international economic situation isn’t helping. He said bigger efforts to shock the state’s economy to life are coming next year with a major tax code overhaul. Proposals include eliminating personal and corporate income taxes.

How voters weigh the Republican message on the economy against their pocketbook reality is the ultimate question this election year, from the presidential election to state legislative races.

“Things haven’t changed that much,” Wells Fargo economist Mark Vitner said of the state’s condition. “We are at a frustratingly slow economic recovery.”

The GOP checklist

In discussing their economic policies, Republicans often use a farming metaphor the folks in Edgecombe understand: Fertile soil will produce jobs. With business-friendly policies and a low-tax environment, they argue, new companies will relocate to the state and existing ones will grow.

“I think we are seeing some green shoots,” said Tillis, the House leader and a business consultant. He still wears the same red “Think Jobs” wristband from the 2010 campaign. “I think there are reasons to be optimistic.”

In an interview last week, Tillis staked a claim on the state’s sputtering economy, even though his party blames Democrats for the current situation.

“This is our economy,” Tillis said. “I am fully confident. I want to own this economy. It is our responsibility. We did a good job of starting, and we’ve got a lot of unraveling to do of bad policies that have hamstrung us that cannot be undone overnight.”

His Senate counterpart, President Pro Tem Phil Berger, expressed more caution.

In looking back at their first session in power, both GOP leaders point to a laundry list of accomplishments they believe will help spur the state’s economy:

• Resolving a roughly $2 billion budget deficit.

• Allowing a temporary sales tax to expire.

• Creating a $3,500 tax break for business owners.

• Capping the gas tax at 37.5 cents a gallon.

• Implementing school literacy requirements.

• Reducing a variety of state regulations.

• Establishing a framework for natural gas drilling.

• Streamlining workers’ compensation and medical malpractice laws.

The state budget also provided $5 million to train long-term unemployed workers through the community college system, among other targeted programs.

Improving, yet lagging

When the GOP took control of the legislature in January 2011, the jobless rate sat at 10.5 percent, and the state ranked seventh-worst in the nation. In May, the unemployment rate was 9.4 percent. Republicans tout preliminary federal labor statistics showing about 20,000 new jobs in the past year.

But despite those gains, North Carolina’s rate now ranks fourth-worst among all states and the District of Columbia.

The state’s $385 billion gross domestic product improved slightly in 2010 and 2011, before and after Republicans took control, nationally ranking the state 15th last year in growth.

Republicans take partial credit for the improvements, as does Democratic Gov. Bev Perdue.

“You may not agree with it, but the fact of the matter is, everywhere you go you find if you put money back into the economy, you are going to find economic growth,” said Sen. Bob Rucho, a leading Republican, touting the 2011 tax cut package. “It puts more money into the pockets of individuals to buy goods and services ... that causes a demand for new business and then the demand for new hires. ...

“Is it back to where we want it to be? No,” Rucho continued. He blamed Perdue and the national economy as impediments. “What we have done is we put North Carolina into the position of being on the edge of the beginning of the recovery.”

The Charlotte Republican points to a study lawmakers requested from economists at UNC-Chapel Hill. It suggested that the expiration of the temporary 1-cent sales tax and business income tax breaks would create roughly 7,700 private sector jobs in the first year, with ripple effects adding thousands more indirect jobs. However, the loss in state revenue led to a loss of roughly 6,400 government jobs.

The N.C. Chamber of Commerce, which has acted as an ally to Republican lawmakers, touts the job-creation measures, saying they made the state more competitive.

‘Missed opportunities’

But state Commerce Secretary Keith Crisco said the legislature “missed so many opportunities” to boost the economy. In an interview, Crisco said he was concerned about changes to the state’s economic recruitment tools. He wanted to see the state budget fund programs aimed at hiring recent military veterans and improve workforce training.

“I’m afraid the (state’s) image has been tarnished because of the uncertainty,” Crisco said. “And they don’t get a good grade on marketing with some of the education cuts.”

Crisco, a Perdue appointee, said the legislature can’t take credit for the state’s job creation in recent months, instead crediting long-term programs in place before Republicans took power. “I think it’s premature to think that any of those programs are having an impact,” he said of the GOP agenda.

Republicans acknowledged that many of these proposals aren’t easy to explain to voters and the effects are not immediate. For instance, potential natural gas drilling won’t affect the workforce for roughly a decade. Top lawmakers declined to put a timeline on when their policies will lead to significant results.

Democrats dissatisfied

From their perspective, Democrats said Republicans didn’t do enough to revive the economy and spent too much time on controversial social issues, such as the constitutional marriage amendment, a measure in opposition to the national health care law and a bill to require waiting periods before abortions. And much of the economic legislation came in 2011, Democrats said, meaning the economy wasn’t the priority this year.

Even the economic measures Republicans pushed, Durham Democratic Rep. Larry Hall argued, weren’t designed to help the average person. He complained that GOP lawmakers passed a business income tax break as a way to help small companies, even though it also applies to large law firms and doctors, costing the state $336 million a year.

“We didn’t create jobs, and we didn’t support education,” Hall said. “And whatever else we did down here, we missed the priorities.”

Democrats sponsored a bill to give business owners with fewer than 50 employees extra tax breaks if they hire long-term unemployed workers in economically depressed areas. Rep. Ken Goodman, a Rockingham Democrat who sponsored the measure, voted with Republicans to cut government regulations and reduce medical malpractice lawsuits. But he wanted to go further with targeted tax breaks for areas hardest hit by the recession.

“That’s where jobs are needed. That’s where people are hurting,” Goodman said. “I just feel like we need to put more focus on the economy and job creation.”

The bill didn’t get a hearing.

Making do with less

In Edgecombe County, with its 13.7 percent unemployment rate, the Republican cuts to state budgets are easier to see than the measures designed to create jobs.

This year’s state budget, if it survives the governor’s veto, eliminates money for a youth development center in Edgecombe and its roughly 60 jobs. Additional cuts to education and the state’s Rural Economic Development Center, which helps bring jobs to local communities, also particularly hurt the area.

“We certainly understand they have to make cuts, but when you do it in an area that is so important to the viability of a community ... that’s real to us. That’s not theoretical,” said Greg Bethea, the Pinetops town administrator.

Across the street from town hall, the women at Pat’s Salon chart the economy in the appointment book. A full book, a good economy. Now folks are waiting longer to schedule haircuts, color treatments and nail appointments. The book is largely empty.

Hairdresser Christian Langley, 31, worked as a BB&T banking account manager in Rocky Mount making about $60,000 a year until she was laid off three years ago. A new job didn’t come easy.

Her unemployment benefits expired, and she went back to school to study cosmetology. Four months ago, she took a job at Pat’s making about $100 a week.

“It’s just something to help. Another tool in the bag,” she said, lighting a cigarette.

And she considers herself a lucky one. She has a job.

Staff writer Lynn Bonner contributed to this report.

Frank: 919-829-4698

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