Amid the recent winter storm, the Tar Heel State experienced a new milestone. For the first time, North Carolina ranked No. 1 in the nation for state-to-state migration. Principled economic policy and leadership made it possible.
According to new Census Bureau data released late January, North Carolina gained 84,000 residents from other states between July 2024 and July 2025. During this time, powerhouses Texas and Florida netted 67,300 and 22,500 new residents, respectively. It’s the first time in decades that any state has gained more new residents than Texas or Florida.
North Carolina didn’t become the top destination for the American dream overnight. In fact, its economic turnaround can be traced back more than two decades. It’s a story worth telling, and state leaders nationwide should take note.
North Carolina state Sen. Phil Berger (R) was there from the start, first winning his seat in 2000. In 2005, Berger was elected leader of the Republican minority in the North Carolina Senate. By 2010, he had led the caucus to a historic victory, giving Republicans a majority in the state Senate for the first time in 134 years. He was elected Senate President Pro Tem in 2011, setting the stage for the most successful state tax reform effort in the nation.
Back then, the North Carolina tax code was not friendly to job creators. The state imposed the highest business income tax rate in the competitive Southeast (6.9%), while North Carolinians also faced a three-tiered personal income tax structure with a top rate of 7.75%.
To say the economy was limping along would be an understatement. That year, unemployment hit 10.5%, and North Carolina ranked 26th in the nation for economic outlook in the Rich States, Poor States: ALEC-Laffer Economic Competitiveness Index.
But that was all about to change.
“[Then-Gov. Bev Perdue] has been talking about making the business climate of North Carolina better for the past two years,” Berger explained in February 2011. “We’ve been in the majority in the North Carolina Senate for two weeks, and we’re already doing something about it.”
In the November 2012 election, North Carolina voters increased Republicans’ majorities in the House and Senate and elected Pat McCrory as governor. Working with then-House Speaker (now U.S. senator) Thom Tillis, Berger pursued a pro-growth tax reform package to ignite North Carolina’s economic engine.
The final plan achieved $500 million of taxpayer savings over two years by lowering and flattening the personal income tax, lowering the corporate income tax, and eliminating the death tax. By July 2013, McCrory had signed the Tax Simplification and Reduction Act into law, and it was off to the races.
The following year, the corporate rate fell to 6%, and the personal income tax was lowered to a flat 5.8% for all North Carolinians. But the tax cuts didn’t end there. Under Berger’s leadership, the personal income tax rate has been lowered repeatedly, falling to 3.99% this year. As revenue targets continue to be met, the rate will fall even further.
For businesses across the state, income tax cuts are also accelerating. After dropping to 6% in 2014 and reaching just 2.5% in 2019, the corporate income tax is on its way to 2% this year and extinction by 2030. This is completely unheard of — and a major force behind the state’s 20% job growth from 2013 to 2023. A real economic revival.
On top of the dramatic tax reductions, North Carolina leaders demonstrated fiscal responsibility over that decade. By 2022, North Carolina had built its empty rainy-day fund to $4.75 billion. Additionally, the economic growth generated by tax rate cuts enabled North Carolina lawmakers to repay more than $3 billion in debt, expand school choice programs, and repeatedly increase teacher salaries.
The state improved its economic outlook ranking in Rich States, Poor States from 26th in 2011 to 2nd overall by 2022. Lawmakers also tackled costly regulations last year by overriding current Gov. Josh Stein’s (D-NC) veto to enact Regulations from the Executive in Need of Scrutiny-style legislation.
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“Over the decade and a half that has transpired since Republicans took control of the North Carolina General Assembly for the first time in over a century, what we have seen is a real transformation of North Carolina state government, and that transformation has led to a real transformation and really a rebirth of the North Carolina economy,” Berger told Carolina Journal in a recent interview.
And he’s right. Thanks to leaders who turned their principles into policy, more than 750,000 Americans have relocated to North Carolina on net over the past decade. As the new leaders in net domestic migration and with job creation surging, don’t expect the North Carolina economy to cool down any time soon.
Lee Schalk is senior vice president of policy at the American Legislative Exchange Council.