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Daily Journal

Two Tries At The One Percent

Feb. 22nd, 2012
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RALEIGH – Although those involved may wish us to forget, there were actually two attempts over the past year to make a certain statistic, one percent, into a political cause here in North Carolina. Both flopped in telling ways.

The obvious example is the Occupy movement, which began on Wall Street but soon spread to Charlotte, Raleigh, Greensboro, and other North Carolina communities. Protesters rallied against crony capitalism, bailouts, and insider influence. So far, so good. Then the rallies turned into squalid camps of bums and professional agitators, with no coherent message or goals. That far, that bad.

The Occupiers sought to frame the fiscal and economic challenges facing us as a war between the wealthy one percent and everyone else. But the other attempt to use the same “one percent” statistic to score political points was less explicit.

When the new Republican majority took over the North Carolina General Assembly last year, its leaders promised to balance the state budget without imposing new tax increases or extending those about to expire. Gov. Perdue insisted that they break their promise – and hers from 2009 – by extending a sales-tax hike for another two years. Otherwise, she said, there would be devastating cuts in education and other core programs.

The legislature refused. Republicans and a handful of Democrats passed their no-tax-hike budget over Perdue’s veto. The governor was frustrated. Liberal lawmakers and activists were furious. After Perdue announced her retirement, the Democrats seeking to replace her have played to their audience by excoriating the Republicans for cutting the education budget rather than raising revenue.

So, what have the two sides been arguing about since last summer? Yep, one percent. That’s the difference between what Gov. Perdue proposed spending on public education and what the GOP-led legislature ended up authorizing for the current fiscal year.

Here’s the math. The Perdue administration proposed a General Fund budget for FY 2011-12 of about $19.9 billion. The final Republican budget was $19.5 billion, about two percent less. Both proposals represented cuts from the “current services” baseline – Perdue’s plan held General Fund spending four percent below the baseline, vs. six percent for the final GOP budget.

In education, the difference between the two budgets was even smaller – either .6 percent or 1.4 percent, depending on how a fund transfer is counted. Call it one percent for short.

Not exactly the stuff of budgetary devastation, was it? That’s one reason why Perdue and her allies lost the battle. In the end, their weak argument persuaded few who didn’t already agree with them.

Recognizing that, the Left shifted gears. Rather than claiming large differences in education spending between the two budgets, liberal lawmakers and activists settled on a different talking point: that the Republican budget had worsened North Carolina’s level of education funding to 49th in the nation.

I agree with them that their “49th in the nation” claim was more rhetorically effective than their prior claim. But it was inaccurate.

The statistic originated with the North Carolina Association of Educators, the state affiliate of the nation’s largest teacher union, the National Education Association. Someone apparently tried to compute what would happen if the Republican budget went into effect in North Carolina and no other state made significant alterations to their own education budgets.

That wasn’t the right way to look at the matter, of course. Most states had fiscal problems last year, too. Most states adjusted their budgets accordingly, including their education budgets. Just this week, the NEA released its annual ranking of per-pupil expenditures, and the latest talking point of the North Carolina Left melted away.

In 2010-11, before the Republicans took over the state legislature, North Carolina’s education spending ranked 45th in the nation. This year, despite modest budget cuts, North Carolina education spending ranks 42nd in the nation.

By the way, I reject the underlying assumption that the more money a state spends on public schools, the better they perform. I’m more interested in outcomes than inputs. But simply as a factual matter, North Carolina’s national ranking in education spending went up, not down.

I await the Left’s next statistical claim with curiosity.

Hood is president of the John Locke Foundation.