Thomas Jefferson had lots to say about lots of things. As the North Carolina General Assembly begins its 2017 session and new Gov. Roy Cooper begins his term, it’s worth considering what Jefferson had to say about striking the proper balance between local and central authority.
Jefferson was clearly wary about the latter. “It is not by the consolidation, or concentration of powers, but by their distribution, that good government is effected,” he wrote in 1821. He added that if the country were not already divided into individual states, that would be necessary so that “each might do for itself what concerns itself directly, and what it can so much better do than a distant authority.”
Similarly, Jefferson observed that states were divided into counties, and counties into townships or wards. “It is by this partition of cares, descending in gradation from general to particular, that the mass of human affairs may be best managed for the good and prosperity of all,” he concluded.
You’ll not find a better description of the case for devolving power within a federal system. And yet, Jefferson did not think states could do whatever they wanted to their citizens, or localities to theirs, without oversight from above. “Were it observed that either party [the central government or a state] set up unjustifiable pretensions,” he wrote, “perhaps the other might be right in opposing them by a tenaciousness of his own rigorous rights.”
Since the Republicans won control of the North Carolina legislature in 2010, we have witnessed numerous disputes between localities and the state. The highest-profile dispute began last year with Charlotte passing an anti-discrimination ordinance and the General Assembly responding with House Bill 2. But earlier debates produced legislation with major impacts on North Carolina policy — perhaps none more so than the 2012 bill that essentially ended involuntary annexation in our state.
For decades, North Carolina was extremely deferential to municipalities. They could yank properties into their jurisdiction without giving affected landowners a vote, while avoiding any real responsibility to deliver services to those new residents for years.
Advocates of forced annexation made two key arguments. First, they said it was only fair to tax people who lived outside city limits but worked, shopped, or played in the city. Second, they said that annexation was good for city finances, which in turn was good for the state’s overall economy.
Opponents countered that nonresidents who worked, shopped, or played in cities already paid city taxes while doing so, either directly on retail sales or indirectly by bearing a proportional share (through higher prices or lower wages) of taxes on commercial or industrial property. They also observed that most states already protected property owners from annexation abuse. Many had economies at least as healthy as ours.
Did forced annexation really do wonders for city finances in North Carolina? A new study published in the academic journal Growth and Change raises doubts. Co-authors Russel Smith from Winston-Salem State University and Whitney Afonso from the University of North Carolina at Chapel Hill found during the pre-reform period, greater annexation activity “resulted in a decrease in municipal fiscal health for North Carolina municipalities and that involuntary annexation had a particularly detrimental effect.”
Municipalities lost on that issue. So far, however, they’ve won on another one: keeping North Carolina from adopting a constitutional amendment blocking localities from condemning private land to pursue “economic development” — to transfer that land to some other private party, in other words. As before, the argument is partly economic, that constraining eminent domain would damage North Carolina’s economic competitiveness.
Once again, the evidence says otherwise. Another new academic study, this one in Economic Development Quarterly, found that states that have protected their citizens from eminent-domain abuse “experienced no adverse effects in terms of state employment and gross state product.”
Protecting the property rights of North Carolinians won’t hurt our economy. It’s also an example of the proper use of state powers to limit abuses by localities. I think Jefferson would approve.
John Hood is chairman of the John Locke Foundation and appears on the talk show “NC SPIN.” You can follow him @JohnHoodNC.