North Carolina’s new General Assembly returned to Raleigh Wednesday. The top item on legislators’ to-do list is filling a budget hole now estimated at $3.7 billion. While lawmakers address the state’s budget woes, the John Locke Foundation’s research staff hopes they’ll tackle other high-priority items as well. Dr. Roy Cordato, JLF Vice President for Research and Resident Scholar, discussed his colleagues’ recommendations for the legislature’s First 100 Days with Donna Martinez for Carolina Journal Radio. (Click here to find a station near you or to learn about the weekly CJ Radio podcast.)
Martinez: Let’s talk first about the process of the budget. What would you like to see this new legislature do?
Cordato: Well, as part of our proposal, there’s a lot to do with the budget in terms of spending cuts and letting certain tax increases expire. But immediately, we’d like to see them reform the process a little bit — allow people to look at the budget, have a chance to study it for at least 72 hours.
Martinez: Novel idea.
Cordato: Yes, isn’t that amazing? Also, to have a fiscal note that would look at five-year projections. We would like to see them put the entire budget online so that it’s transparent and people can see what’s in it. So there are a number of process things that we think that they should do before they even dive into the nuts and bolts of the budget.
Martinez: You know, we chuckle about this, but Roy, some people might be very surprised to find out that that is not the current policy — any of this.
Cordato: Yeah, that’s exactly right. It’s usually done last minute with very little transparency. That, hopefully, will change with the new legislature. We’ll see.
Martinez: Now, job one, as I said, will be the budget. But then there are a whole host of other very serious and consequential policy areas that the Locke Foundation would love to see the legislature take up. Let’s talk first about something that I know is one of your pet peeves. That is Senate Bill 3, having to do with renewable energy. What would you like to see done on that?
Cordato: Well, we’d like to see that bill repealed. We think that it should have never been passed. It really does nothing. There are absolutely no environmental benefits associated with it. What it’s doing is, it’s costing the state thousands of jobs. A study by Beacon Hill Institute at Suffolk University concluded that it’s costing thousands of jobs, with the state losing money and citizens of North Carolina having to pay significantly higher rates than they otherwise would have to pay. So we think the whole thing should be repealed. Unfortunately, the Republicans all voted for it in the first place, so I’m not sure that — you know, they will have to change their minds. But the fact is that they voted for it — I think mindlessly. I think they were anxious to jump on the environmentalist bandwagon, and we want them to jump off of that bandwagon and to think about it. There was no cost-benefit analysis done when they voted on it. They really did not examine the consequences very much. They just wanted to be part of the tidal wave in favor of global warming legislation, which is really what this is about, and it’s not going to do anything with respect to that.
Martinez: Could it be, though, that the recent publicity around questions about the data related to climate change and global warming — could that be something that might spur the General Assembly? Even though Republicans supported a lot of this, could it spur them to back off this?
Cordato: I hope so. And plus, with the national Republican Party being so adamantly against cap and trade. This is really North Carolina’s version of cap and trade, except it’s cap without the trade. We actually have a cap on the amount of electricity that we can get from conventional sources like natural gas and coal and nuclear, and a minimum that we have to get from really very dumb sources like wind and solar.
Martinez: Let’s move from energy to a program that was highly touted several years ago when it was passed into law in North Carolina — the Education Lottery.
Cordato: Well, we were against it. We were against it originally, and we’re still against it, and we’d like to see it repealed. We don’t think it’s a good idea. Money is fungible.
Martinez: Explain what that means.
Cordato: What that means is, once money is in a pot, it can be allocated anywhere. … This is supposed to go toward education and building schools, but the fact is that once money is in a pot, it can be moved around in any way you want it to. So we think it should be repealed. It’s not bringing in anywhere near the money that they have projected it would. And the fact is that it takes advantage of the poor and lower class, who are the people who are really playing the lottery. Unfortunately, if you look in the richer counties, it’s not being played. In the poorer counties, it is, where unemployment is the highest and so forth. This is really not very good. We do not think that the government should be in the gambling business.
Martinez: Let’s talk about jobs and the economy. For years now, the Locke Foundation has written and analyzed many of the state’s corporate welfare laws. Tell us about some of those and what you hope to see the legislature do.
Cordato: Again, we’d like to see all of these things repealed — the Golden LEAF Foundation money, the One North Carolina Fund — all of these things we’d like to see repealed because we don’t think that the government should be in the picking-winners-and-losers business, which is really what so-called economic development is about. What we think should happen is that we should change our entire perspective on this and move from what’s being called economic development — which is really corporate welfare-based — to what we like to describe as economic growth. Focus on increasing gross state product for the state — the state’s GDP. Cut taxes across the board. Cut regulations across the board for everyone, not just for special groups.
Martinez: That’s going to be a tough sell, though. People are out of work, they’re looking for jobs, and they’re looking for someone to “do something.” And that usually means the government. That’s the entity they turn to.
Cordato: That’s exactly right. And it’s also very attractive to politicians who like to say, “Look at these jobs I created,” and go to the ribbon cuttings and get their pictures taken. So it is a tough sell. But that’s an area that we want to see change in, and we think it should be done.
Martinez: Roy, property rights also makes the list of issues that you hope to see the legislature discuss. Forced annexation and eminent domain — what are they, and what would you like to see done?
Cordato: Well, we think that forced annexation should be eliminated, that people should not be forced into living in towns that they don’t want to live in — that there should be votes before an area is annexed. We think on eminent domain, of course this is driven by the New London case [Kelo v. City of New London], and we don’t think there should be any takings for economic development purposes. And this means that we really need a constitutional amendment in North Carolina saying that very explicitly.
Martinez: This is a pretty serious list. What do you think the odds are that the legislature will get to these issues?
Cordato: Well, some of them, I think they will. We call for eliminating the charter school cap, for example, which we think is very, very important. And I think there’s a pretty good chance. There seems to be a good consensus building around that, so I think some of these things they’ll get to and others, unfortunately, I think they won’t. The budget, to be quite frank, is going to take up a lot of time.