From Staff Reports 

With the twin threats of a crippling economic recession and hyperinflation looming as the result of the Biden administration’s policies, North Carolina is in a much better position to work its way through the likely resulting quagmire than many other states because of its roughly $3 billion budget surplus for 2021, according to N.C. Rep. Warren Daniel, R-Morganton.

Daniel, who — as a result of redistricting — now represents the eastern half of Buncombe County, reported on the massive budget surplus and other accomplishments of the Republican-dominated state General Assembly in his debut address to the Asheville-based Council of Independent Business Owners on Aug. 5 at UNC Asheville’s Sherrill Center. 

About 40 people attended the early-morning issues meeting

Also addressing CIBO was Vic Isley, CEO of Explore Asheville Convention & Visitors Bureau, who provided an update on the Buncombe County Tourism Development Authority.

After the CIBO meeting attendees recited the Pledge of Allegance at the beginning of the meetig, CIBO President Buzzy Cannady noted wryly, “Where else do you hear the Pledge of Allegience anymore?”

Cannady, who served as the meeting’s moderator, introduced Daniel, pointing out that he is a North Carolina native from Burke County, which is located in Western North Carolina, and for which the county seat is Morganton, who has served in the North Carolina Senate since 2011. He is a graduate of Freedom High School and the United States Military Academy at West Point. He also is a graduate of UNC Law School at Chapel Hill.

“We won’t hold that you’re a UNC grad against you,” Cannady quipped to Daniel, prompting laughter from the senator as well as others present.

“Yeah, I’m a ‘WNC boy,”’ Daniel said with a smile, in beginning his address. “I enjoyed the beautiful drive up here (to Asheville) today.” He also thanked Cannady for his warm introduction. 

Daniel began by reviewing the history — and successes — of the last roughly 10 years, noting that “Republicans have been in charge since 2011.” (Daniel first was elected to the General Assembly in 2011.)

To that end, Daniel noted, “Pre-2011, we (the General Assembly) had wild fluctuations of increases and decreases in the state budget.

“What we’ve tried to do in the last 10 years is to try to control our budget growth in regard to what our inflation is. We’ve tried to keep budget growth between 1 and 5 percent. This year it might be slightly over 5 percent.

“When Republicans took control (from the Democrats) in 2011, there was a recession. We (the GOP legislators) sort of set the state up on a path where we started having pretty substantial (budget) surpluses,” although, he acknowledged, “we probably had a deficit during the COVID year (2020).”

Therefore, Daniel said, North Carolina has experienced the security of having about “$10 billion in the last two years of surpluses.”

He added, “With the ‘rainy day fund,’ we’re going to push that to $4.25 billion.”

What’s more, the state senator said,  “We created an inflation reserve... Inflation has hit the state on a large scale,” with a 10 percent increase in gas costs, as an example.

In other legislative accomplishments Daniel said, “We did increase entry level base pay for teachers” as well as giving “pay raises for teachers by an average of 4.2 percent.”

On a separate matter, he asserted, “With more EVs (electric vehicles) on the road and more efficient (gas-fueled) cars, our (state) gas (tax) revenues are down, so we redirected 2 percent of our annual sales tax revenue and directed it” to the gas tax fund for road-building, repairs and maintenance.

Daniel then reiterated, “Our (state) savings reserve balance — it’s going to be over $4 billion. This is not our only reserve fund. So we feel like we’ll be in good position, if we have to use it.”

Further, he said, “Medicaid spending is another area that’s been troublesome in our budget... Prior to GOP takeover of state legislature was in the red, so we’ve created a Medicaid reserve.”

In his 11 years in the state legislature, Daniel noted, “We set severe goals for state tax reform. If you can move to a consumption-based tax system,” it’s a better path.

“We actually have the lowest corporate state (tax) in the country for any state that levies a corporate tax.

“We’re also the friendliest military state in the country

“We’re 11th in the country in state business tax climate rankings. 

“Back in 2012, we had an unemployment reserve in North Carolina in 2012, with a $2.8 billion debt,” rather than a surplus, but “for 2021, we have a $3 billion surplus“It’s basically gone” from a major deficit to a major surplus.

In reiterating the legislature’s accomplishments in education, Daniel said, “Nine  consecutive teacher pay raises by the General Assembly. Two years, the raises were vetoed (by the governor, Roy Cooper, a Democrat). The teachers probably would have been in a better situation if the raises weren’t vetoed in those two years.

“Last year, average teacher pay was about $55,000. I’d guess it’s about $56,000 now.”

Pausing, he then asserted, “Bernie Sanders used to speak about how college tuition should be free... If you’re a North Carolina resident under North Carolina Promise, no in-state tuition increases for a standard undergraduate college term” will be charged.

Also, Daniel said that the General Assembly has acted to lower “tuition at four (in-state) colleges and universities, including WCU” (Western Carolina University in Cullowhee).

He added, “Undergraduate enrollment in fall semester at WCU in 2017 was 11,034 (students) versus 12,243 (students) in 2020,” with the total percent increase of program at 11 percent.

Daniel then reiterated, “Over the last 11 years, we’ve become known as more of a ‘business-friendly’ state.

During a question-and-answer session that followed Daniel’s address, CIBO member Mac Swicegood asked, “You’ve done a great job on this, but what I’m not clear on is how the federal government keeps promoting electric vehicles. Our roads were built on gas taxes. How are we going to handle that?”

“Six percent of sales taxes will have to go to roads,” Daniel replied.

To that, Swicegood said, “Well, the federal road fund is broke.”

“ All I can tell you is smart people are thinking about it,” Daniel answered, prompting laughter from CIBO meeting attendees.

On a separate question from an unidentified CIBO attendee, Daniel said, “North Carolina is growing — it is one of the fastest-growing states. We’re still driving down income tax rates.” For instance, he noted, “We (the state) have no income tax for military retirees that will be coming here.”

Moreover, he asserted, “We’re concerned about a recession, but we feel we’re well-positioned for that.”

An unidentified man asked about the possibility of Medicaid expansion in the state.

“The (state) Senate passed a comprehensive Medicaid expansion bill,” Daniel replied. “It went to the House, which indicated it’s less enthused.. We’ll have a special session on it later.”