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North Carolina is charging ahead of California and the reason why is surprising

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North Carolina is charging ahead of California and the reason why is surprising

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Earlier in May, two starkly different fiscal news items highlighted the divergent paths taken by North Carolina and California. While North Carolina celebrated news of projected revenue surpluses in 2024 and 2025, California is grappling with a $44.9 billion budget deficit. How did these two states end up in wildly different places?  

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The contrast is emblematic of the philosophies governing these states. North Carolina’s conservative fiscal policies, emphasizing low taxes and restrained spending, widely differ from California’s high tax rates and expansive spending programs. The recent outcomes suggest that North Carolina’s approach offers a model of responsible governance from which other states, including California, could learn. 

North Carolina’s success results from deliberate and sustained conservative fiscal policies. The state embarked on a series of tax reforms, which started in 2013 and were the largest in its history. These reforms included reducing the personal income tax rate from a progressive structure topping out at 7.75% to a flat rate of 4.75%, scheduled to drop further to 3.99% by 2026. Corporate tax rates were also slashed from 6.9% to 2.5% — the lowest in the nation for states that levy such a tax — with plans to phase it out entirely by 2030. 

CALIFORNIA HAS YET TO PROVIDE 1,200 TINY HOMES FOR STATE’S HOMELESS THAT WERE PROMISED IN MARCH 2023

These tax cuts were not merely superficial adjustments but were coupled with prudent spending measures. North Carolina’s general fund spending has been managed to ensure essential services are funded without resorting to excessive borrowing.  

The massively slow and expensive construction of the California bullet train project is photographed in Corcoran, California, left, and Hanford, California, right. (Robert Gauthier/Los Angeles Times via Getty Images | George Rose/Getty Images)

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Fiscally conservative policies retired 40% of state debt within a decade, reducing general fund-supported debt from $6.5 billion in 2012 to $3.9 billion by 2021. Moreover, the state has avoided budgetary gimmicks and one-time fixes, focusing instead on long-term fiscal sustainability. 

Spending restraint has been a hallmark of North Carolina’s approach. State legislators have maintained strict controls on spending growth, ensuring expenditures do not outpace revenue. This disciplined approach has allowed North Carolina to build substantial reserves, including a savings reserve (or “Rainy Day Fund”) that currently stands at $4.75 billion, equivalent to just over 15% of the 2023-24 state general fund budget.  

This fiscal prudence has positioned North Carolina to weather economic downturns without resorting to drastic cuts or tax hikes, avoiding volatility in the lives of state workers. 

The result? North Carolina has seen robust economic growth. According to the John Locke Foundation’s 2024 North Carolina Budget, Tax, and Economic Highlights, from 2016 to 2022, North Carolina’s per capita income grew at an average annual rate of 5.3%, higher than the national average and highest among its neighbors. North Carolina’s real GDP increased by a total of 11.4% from 2017 to 2022, which is also higher than the national average. 

In contrast, California has pursued a high-tax, high-spending approach. The state imposes some of the highest tax rates in the country, including a top personal income tax rate of 13.3% and a corporate tax rate of 8.84%. According to the California Policy Center, “In just the last ten years, the General Fund budget has grown by 84 percent after adjusting for inflation and for population growth.”  

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California ranked No. 49 in the Fraser Institute’s 2023 economic freedom report, which evaluates states and provinces based on variables such as government spending, taxes, labor market freedom, and more. North Carolina ranked No. 13.  
 
A significant portion of California’s tax revenue comes from capital gains taxes, making the state highly dependent on the stock market’s performance. In boom times, this can lead to substantial windfalls; however, it also means that revenue is highly volatile and can plummet during market downturns, leading to substantial budget deficits. 

Its expansive spending on social programs, education and healthcare exacerbated California’s fiscal woes. While these programs initially aimed to provide a high level of public service, they have also led to fiscal instability. 

Democratic California Gov. Gavin Newsom leads a state that has gone from surplus to a huge deficit. (Justin Sullivan/Getty Images)

A key issue is that high tax rates have not translated into stable revenue streams. The Golden State’s reliance on high-income earners and capital gains means that its revenue is highly volatile, fluctuating significantly with economic cycles. The New York Times said, “When the rich do well, the state government reaps a bonanza. But when the stock market slumps or initial public offerings dwindle, revenue plummets.”  

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This volatility makes budgeting challenging and often results in substantial deficits during economic downturns. 

California’s budget process is further complicated by the state’s commitment to numerous unfunded mandates and pension liabilities. The state’s pension system is underfunded by billions of dollars, putting additional strain on the budget. Despite high tax revenues, the state frequently finds itself in a fiscal crisis, forced to make painful cuts or propose tax increases to balance the budget. 

When a state’s budget is volatile, the effects on state workers such as teachers, state park employees and correctional officers can be profound and destabilizing. Budget unpredictability often leads to cycles of boom and bust, where periods of fiscal surplus may result in temporary increases in salaries, hiring and program funding, only to be followed by sharp cutbacks, layoffs and pay freezes during downturns.  

California ranked No. 49 in the Fraser Institute’s 2023 economic freedom report, which evaluates states and provinces based on variables such as government spending, taxes, labor market freedom, and more. North Carolina ranked No. 13.  

This instability can create a climate of uncertainty and low morale among state employees, who may face the constant threat of job insecurity and reduced benefits.  

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North Carolina’s fiscal discipline offers a blueprint for other states, demonstrating that conservative fiscal policies can lead to economic stability and growth. By maintaining low taxes and controlling spending, North Carolina has created an environment conducive to business and investment, fostering economic resilience even during challenging times.  

California, on the other hand, illustrates the pitfalls of high taxes and expansive spending without adequate fiscal controls. As the nation observes these contrasting outcomes, it becomes clear that responsible budget management, as exemplified by North Carolina, is essential for economic prosperity. States should adopt similar conservative fiscal policies to achieve stable and sustainable economic growth. 

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San Francisco, CA

Vigil held for 2-year-old girl killed in SF Mission Bay crash

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Vigil held for 2-year-old girl killed in SF Mission Bay crash


Walk SF and Families for Safe Streets held a vigil Monday evening to honor a 2-year-old girl who was struck and killed by a driver Friday night in San Francisco’s Mission Bay neighborhood.

The crash happened just before 9 p.m. at Fourth and Channel streets near Oracle Park. Police said the child’s mother was also injured and taken to a hospital with non-life-threatening injuries. The driver remained at the scene, and authorities said drugs or alcohol are not believed to be factors.

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Community heartbroken

Community members gathered at the intersection Monday to light candles and lay flowers. Among them was the Howard family.

“We’re just heartbroken and sad,” said Hidelisa Howard.

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“I was thinking about heartbroken parents, someone who cannot get their daughter back,” said John Howard.

The intersection is designated as part of San Francisco’s 2022 High Injury Network, identifying streets with the highest concentration of severe and fatal traffic crashes. Speed cameras were recently installed in the surrounding neighborhood.

Jodie Medeiros, executive director of Walk SF, called the crash a tragedy, noting a previous fatal collision involving a child at Fourth and King streets several years ago.

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Traffic intensifies

Parents in the area said traffic has intensified with nearby events and development.

“We love having people here in the neighborhood, and it’s brought a lot of life to the area,” said Hidelisa Howard, who lives nearby. “But at the same time, we have people coming in from out of the area. They’re not familiar with the streets, they’re running the lights, they’re running the crosswalks.”

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District 6 Supervisor Matt Dorsey said the intersection has been problematic.

“Sometimes people go too fast. I don’t know that this was the issue here, but we need to do everything we can to make our neighborhoods and our streets safer,” Dorsey said.

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On Monday, crews with the SFMTA repainted crosswalks and re-timed traffic signals at the intersection.

“It just feels like there’s so many young children in this neighborhood that there should be improvements made to the way that the traffic flows around here,” said Aanisha Jain, a San Francisco resident.

 

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Denver, CO

Denver bans federal law enforcement officers from covering their faces, DHS says it won’t comply

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Denver bans federal law enforcement officers from covering their faces, DHS says it won’t comply


Denver city leaders unanimously passed a ban on all officers, including Immigration and Customs Enforcement agents, from wearing face coverings while detaining or arresting people. That law also requires officers to wear visible identification.

It’s the second sweeping ordinance against federal officers in Denver in just a few days. Last Thursday, Mayor Mike Johnston signed an executive order banning federal immigration agents from operating on city property without a judicial warrant.

An federal immigration agent on Feb. 5, 2026 in Minneapolis.

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Stephen Maturen / Getty Images


 It also directs Denver police, deputies and fire personnel to investigate reports of violence and criminal behavior.

The Department of Homeland Security responded calling the executive order “legally illiterate,” adding, “no local official has the authority to bar ICE from carrying out federal law on public property … and while Mayor Johnston continues to release pedophiles, rapists, gang members, and murderers onto their streets, our brave law enforcement will continue to risk their lives to arrest these heinous criminals.”

DHS didn’t mince words when responding to Denver’s new face coverings ban either, saying in part, “To be crystal clear: we will not abide by a city council’s unconstitutional ban. Our officers wear masks to protect themselves from being doxxed and targeted by known and suspected terrorist sympathizers. Not only is ICE law enforcement facing a more than 1,300 percent increase in assaults against them, but we’ve also seen thugs launch websites to reveal officers’ identity.”

On the other hand, the Denver City Council didn’t mince words when it approved the ban.

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“It’s very disturbing to me, as an American, to see masked agents on the street,” said Councilman Kevin Flynn who represents District 2. “I don’t know what the best way is to enforce our immigration laws, but I think I know the worst way when I see it.”

“I said all along, this was a slam dunk,” added Councilman Darrell Watson of District 9.

Last month, a federal judge struck down a California law prohibiting federal agents from wearing masks. But, the city council says it made sure its ordinance is enforceable.

You have to treat all law enforcement the same,” said City Council President Amanda Sandoval. “So, our sheriffs can’t have masks. Our State Patrol can’t have masks. And federally you can’t have masks. And we delineate that within the ordinance which, that’s where California got the issue.”

Sandoval said she was monitoring the legal process and comparing the two ordinances to ensure they would be good to go.

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Although the city council believes the ordinance is constitutional, the Denver Police Department says it’s still working to determine what implementation could look like, and provided this statement to CBS Colorado:

“Our Safety departments are working with the City Attorney and bill sponsors to determine what implementation could look like. Of utmost importance is discretion and prioritizing de-escalation when encountering these situations. Our goal is to apply this ordinance in a way that builds trust and transparency without putting officers, deputies, or the public at risk.”

Coupled with the city’s new executive order, Sandoval believes Denver now has the necessary guidelines in place.

“A map for residents to understand predictability, and that’s what I always want, is what can the residents be able to rely on.”

There are exemptions in place for the ban, for example: during an active undercover operation, when gear is required for physical safety, and for personnel performing SWAT duties.

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Seattle, WA

Joey Daccord makes 35 saves as Seattle Kraken earn 2-1 win over Hurricanes

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Joey Daccord makes 35 saves as Seattle Kraken earn 2-1 win over Hurricanes


SEATTLE, WASHINGTON – MARCH 02: Andrei Svechnikov #37 of the Carolina Hurricanes shoots the puck during the second period of a game against the Seattle Kraken at Climate Pledge Arena on March 02, 2026 in Seattle, Washington.  (Christopher Mast / NHLI / Getty Images)

Joey Daccord made 35 saves and the Seattle Kraken survived a 6-on-4 penalty kill for the final 90 seconds for a 2-1 victory over the East’s top team in the Carolina Hurricanes on Monday night.

Kaapo Kakko and Ben Meyers each scored in the second period for the Kraken as they managed to beat a Hurricanes team that has the second-best record in the NHL, trailing only the Colorado Avalanche. The Kraken are now in a playoff spot by five points as they hold the No. 3 seed in the Pacific Division with 22 games to play.

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Nikolaj Ehlers scored the only goal of the night for the Hurricanes late in the second period, but Seattle was able to withstand Carolina’s offensive push in the final period to secure a second straight victory.

The Hurricanes are always a high-volume shooting team and Daccord faced plenty of chances. Carolina had 83 shot attempts to just 31 for the Kraken. Shots on goal were 36-15 in favor of the Hurricanes as well, but scoring chances were just 20-13 in Carolina’s favor as Seattle did a good job limiting the danger of the shots sent at Daccord.

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It was an eventful but scoreless first period between the two teams, with Carolina owning a 13-7 edge in shots. All three goals would come in the second.

Adam Larsson – who assisted on both goals for Seattle – deflected an Alexander Nikishin into the neutral zone to start a two-on-one rush chance for Kakko with Berkly Catton in support as Kakko ripped a shot through the armpit of Carolina goaltender Frederik Andersen for a 1-0 lead.

Kakko said he wanted to make the pass to Catton, but the lane was covered by Shane Ghostisbehere, so he elected to shoot.

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The Kraken earned a power play chance three minutes later on a tripping call against Eric Robinson. Carolina completely neutered the man-advantage for the first 90 seconds before the Kraken appeared to extend the lead.

With 15 seconds left on the power play, the Kraken rushed into the Hurricanes’ zone with Kakko finding a streaking Jaden Schwartz open on the back door for an easy finish behind Andersen. However, Carolina successfully challenged the goal for a missed offsides on Shane Wright that wiped out the goal.

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But the Kraken still managed to extend the lead soon after.

Jacob Melanson continues to be a spark plug for Seattle and helped restore the momentum immediately after the disallowed goal. On the shift coming out of the power play, Melanson delivered a big hit and connected with Adam Larsson on a breakout pass that sparked a rush. Ben Meyers crashed toward the net and was able to finish off his own rebound on a pass from Freddy Gaudreau to officially make it a 2-0 lead.

Melanson didn’t even get an assist out of the sequence, but was a big part of creating a goal for Seattle.

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After being extremely sharp defensively all night, Carolina finally pounced on an opportunity the Kraken were unable to turn away. Vince Dunn was just unable to control a loose puck in front of Seattle’s net as it landed on the stick of Nikolaj Ehlers instead, who snapped a shot past Daccord to make it a 2-1 game with 90 seconds left in the second period.

The Hurricanes took 32 shots in the third period as they attempted to find a tying goal, but only nine made it to Daccord, and he stopped them all. 

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Eeli Tolvanen was called for Seattle’s first and only penalty of the night – a holding call after breaking his stick – with 90 seconds left to play. With Andersen on the bench for a six-on-four chance for Carolina, Daccord stopped all three shots he faced to close out the win for Seattle.

The Source: Information in this story came from FOX 13 Seattle reporting.

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