What the Legislative Business Ratings Are and Why They Matter

The North Carolina FreeEnterprise Foundation (NCFREE) will be unveiling the 2023-2024 Legislative Business Ratings (LBR) on August 29th, 2024. The cornerstone product of NCFREE, the LBR scores lawmakers on a scale of 0-100 based on their friendliness toward free enterprise business issues during the 2023 Long Session and 2024 Short Session.

What is the LBR?

The LBR is a tool for business leaders, the media, and voters to use to assess whether a lawmaker is generally favorable towards free enterprise issues or not. The scores are on a scale of 0-100, with zero being maximally anti-free enterprise and 100 being maximally in support of free enterprise. A score of 50 would mean that the likelihood that lawmaker supporting any given free enterprise issue is roughly a coin flip.

Here is a snapshot from the 2020 LBR scores:

Member	District	2019 LBR	2020 Objective Score	2019-2020 Session LBR
John Faircloth	62	86.4	100	89.7
Michele D. Presnell	118	85.7	100	88.9
Michael H. Wray	27	84.9	100	88.1

Impact

The LBR plays a significant role in influencing the landscape of free enterprise in North Carolina. As a comprehensive assessment tool developed by NCFREE, the LBR is highly trusted by the business community and free enterprise-minded voters. The ratings are calculated using a blend of objective and subjective criteria, including lawmakers’ voting records on key bills, assessments from business leaders, trade associations executives, and lobbyists.

By highlighting legislators’ stances on critical issues, the LBR serves as an accountability measure, providing valuable insights for business leaders, voters, and the media. The LBR helps ensure that lawmakers’ actions align with the promotion of a favorable business climate in the state. The LBR’s impact extends beyond mere scoring, as it fosters a more informed electorate and encourages policymakers to prioritize pro-business legislation, thereby supporting the broader goals of economic growth and free enterprise in North Carolina.

Full Methodology

The 2023-24 LBR is a combined report covering both the 2023 Long Session and the 2024 Short Session.

A lawmaker’s LBR score consists of three components:

• Objective Component: Evaluates how each lawmaker voted on selected free enterprise bills.
• Subjective Component: Surveys free enterprise leaders with extensive knowledge of the legislature, including business leaders, trade association executives, and government affairs professionals.
• Bill Sponsorship Component: Assesses the net number of bills a lawmaker sponsored that favor free enterprise.

The LBR formula is as follows:

LBR score = [(Objective score × 2) + Subjective score] ÷ 3 + (Number of key bill primary sponsorships × 0.25)

Objective Component

The NCFREE Research Committee selects bills that significantly impact North Carolina’s free enterprise system. The Committee then determines the pro-free enterprise stance for each bill. Lawmakers who voted in line with the pro-free enterprise position receive a score of 100 points per bill; those who voted against it receive 0 points. This year, the Committee evaluated 25 bills for the state Senate and 28 bills for the House, including bills from both the 2023 Long Session and the 2024 Short Session.

Subjective Component

Surveys are sent to hundreds of free enterprise leaders with extensive knowledge of the legislature, including business leaders, trade association executives, and government affairs professionals. They are asked to score lawmakers on a scale from 0-100 reflecting the percentage of time the lawmaker was generally supportive of issues crucial to North Carolina’s business climate. The survey provided the following options: “NO OPINION,” “0%,” “10%,” “20%,” “30%,” “40%,” “50%,” “60%,” “70%,” “80%,” “90%,” and “100%.”

Bill Sponsorship Component

This is the smallest of the three components. Lawmakers receive a 0.25-point increase (or decrease) to their scores for each bill they were the primary sponsor of that significantly impacted North Carolina’s free enterprise system, positively or negatively. Lawmakers who sponsored anti-free enterprise bills or amendments had 0.25 points deducted for each. Those who sponsored pro-free enterprise bills had 0.25 points added for each. Only bills that received committee hearings were considered.

Alex Baltzegar, Executive Director