RALEIGH – The North Carolina General Assembly managed to cap off a year of tragi-comedy by carrying out one of the most egregious examples of legislative malfeasance in state history.
As the Associated Press reports (see here: http://www.herald-sun.com/state/6-273043.html), the House and Senate today unfortunately worked out a compromise on a bill to create a pot of cash incentives to be doled out to selected corporations by a few political appointees. This corporate socialism – corporate welfare seems too kind a term – will discriminate against existing businesses, skew the distribution of taxes and services among industry sectors, and serve as an invitation to the kind of political and financial corruption North Carolina has traditionally avoided.
Corporations looking for handouts will naturally think that the way to get to the top of the list for consideration is to provide financial support for the governor and other top politicians. The panel, for its part, will be privy to lots of private information about corporate relocations. It isn't hard to imagine the possibilities for misbehavior, even of an inadvertent variety. Martha Stewart, anyone? I am appalled that so many members in both parties were so exhausted, or so deluded, that they failed to think this policy through.
They should at least have considered the political message they were sending. The General Assembly enacts four budgets in a row with large and growing holes in them. Two years in a row (and probably three given the likely 2003 shortfall), lawmakers raise taxes on North Carolina families. The state also withholds hundreds of millions of dollars in tax revenues legally due to local governments, forcing another round of property tax hikes. And after all this, lawmakers decide that a few big corporations deserve tens of millions of dollars in handouts? Do they have any idea how infuriating this will be to the average voter?
Some are speculating that Democratic leaders, worried about new districts and an anti-tax backlash, wanted to act this year on incentives because they were worried that they might not be in power next year to do it. OK, but how does that explain the many Republican votes for the measure? My view is that many lawmakers were told that this was a "pro-business" vote and felt they had no choice but to go along with it.
That's not legislation. It's emasculation.
I predict that legislators across the political spectrum will look back on this vote and shudder. They will wonder why so many gave so much to so few with so little serious thought. They will regret it. But it will be too late.
Creating new subsidies and tax breaks for selected corporations, having just stiffed taxpayers and localities by hundreds of millions of dollars for the second year in a row, was a policy without either an economic or a political justification. It was the final insult in a year of outrages. Now, voters will have the right – and the responsibility – to respond.