Ken Hare In Depth: North Carolina worries about becoming Alabama

MONTGOMERY, AL (WSFA) - The Charlotte Observer recently warned North Carolinians that its political leaders need only take "12 easy steps" to become Alabama. Just in case you miss the satire, I'll point out that the writer of the newspaper's editorial does not believe that for North Carolina to become Alabama is a good thing.

Being used as an example of how not to succeed is not something anyone likes, even to those Alabamians who might agree that the Observer's editorialist might make some good points.

The editorial makes the argument that tax-cutting by North Carolina legislators is going to make it difficult to provide needed services and quality schools and make North Carolina less attractive to high-end companies to expand jobs there.

In other words, make North Carolina become Alabama.

Reaction from Alabamians to the editorial seems to fall into one of two extremes: One side is using the editorial to make the point that Alabama should raise taxes in order to improve schools and provide necessary services and thereby to improve its economy by becoming more attractive to high-tech or similar businesses more concerned about quality schools and services than just low taxes. The other side pooh-poohs the editorial, saying that low taxes do in fact attract industries and jobs.

Before I attempt to address this issue, let me make this clear: I believe Alabama seriously underfunds its public schools. I also believe that Alabama needs to find new revenue to undergird its General Fund budget which supports such things as prisons and Medicaid -- two programs that are near the breaking point.

I believe that new sources of revenue -- taxes, to use the cold, hard word -- need to be found because our children need good schools and our citizens need quality Medicaid and other state services.

But the issue of whether low taxes or quality services are a better magnet for new industries or job growth is another question altogether, and that is the one that I want to address.

I believe that attracting industries and jobs to Alabama -- or any state, for that matter -- is a lot more complicated than questions of low taxes or even good schools and quality state and local services.

But if you have to choose between low taxes versus quality education and adequate services, I believe Alabama would be better off choosing good schools and public colleges and adequate services.

However, the unquestionable fact is that most companies not only want low taxes, but they also want high quality services and a well-educated work force.

Of course, there are a lot of other issues that go into the equation that determines where a new industry will locate or whether an existing industry will expand and add new jobs: The availability of reasonably priced and reliable energy, location near customers, reliable transportation options for distributing final products or gathering necessary materials to go into that product, governmental and public attitudes toward unions, investment capital, and a qualified work force, for instance.

Tax rates and public services are just two of the factors that go into such decisions.

Respected economist Keivan Deravi said that with businesses, "First and foremost it's all about how they can control the cost of production and maximize profit."

Deravi, an Auburn University Montgomery professor who has consulted widely on the economic impact of the automotive industry in the state, said that Alabama already has some of the cheapest energy for commercial use, and its low rate of unionization is seen by many companies as a positive factor as well.

But it is essential, he emphasized, for the state to have quality educational systems that produce a prepared work force.

"You can have all the technology in the world, all the money in the world, and still someone has to open the factory and turn the machines on,"  he said. "You need the labor. Once you build the labor force, the rest will come."

Of course, a state can raise its tax rates so high that it makes it unattractive to some industries. But Alabama, with one of the lowest tax burdens in the nation, is in no danger of doing that.

Alabama has seen its investment in public education decline drastically over the past four years -- one of the largest such declines in the nation -- and the state's investment in education was never adequate even before the decline.

So while North Carolinians worry about becoming Alabama, Alabamians need to worry that if they don't improve their investment in education and in minimal public services, Alabama could become ... what? Mississippi? Sadly, it's becoming difficult to find an example that supports education and public services worse than Alabama.


Ken Hare was a longtime Alabama newspaper editorial writer and editorial page editor who now writes a regular column for WSFA's web site. Email him at

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