News: CJ Exclusives

Berger: surplus funds a “blessing and a curse”

Berger said funds should be used for infrastructure, tax relief, state worker salaries, and expansion of school choice not massive, new government expenses.

Addressing the N.C. Chamber of Commerce Government Affairs Summit, State Senate leader Phil Berger, R-Rockingham, said the more than $4.5 billion surplus tax revenue North Carolina has in its coffers is both a “blessing and a curse.”

Berger stated the $4.5 billion in surplus revenue does not include another $5 billion in federal COVID relief that is “here or on the way.”

Berger said the funds, mostly one-time, non-recurring money, can and should be used to address critical capital and infrastructure needs, tax relief, state worker salaries, and expansion of school choice. He said it should not be used to create massive, recurring new government expenses.

“I think they (the funds) are a blessing because they do provide us the resources to do some things we have needed to do for a while,” said Berger. “I think those dollars become a curse if we artificially inflate recurring spending on a year over year basis.”

“That is the same strategy, ‘the spend now, think about it later’ that was in place that led to the recession in 2008-09,” he said. “We certainly don’t want those dollars to lull us into that type of decision-making.”

When Republicans captured control of both chambers of the General Assembly in 2010, they inherited a $3 billion budget shortfall and a $3 billion debt to the federal government for unemployment benefits.

“We need to control the year over year growth in reoccurring spending, we need to reduce the tax burden on our job creators in our economy and on individuals, in our economy and we need to mindful what happens to those job creators when government takes to large of a role when regulating certain activity in the private sector,” Berger said.

Berger said the state Senate was committed to funding an expansion of school choice through assisting home school parents with expenses and expanding the state’s Opportunity Scholarship Program for low-income families.

Berger indicated the General Assembly has funds available to meet critical infrastructure needs without further borrowing and additional state debt, signaling Cooper’s proposed $4.7-billion bond proposal is dead in the water.

House Speaker Tim Moore, R-Cleveland, echoed Berger that state employee raises would be a top priority for Republicans in the General Assembly. He pointed out the General Assembly has already funded enhancements to the state’s third-grade reading program and a summer learning program championed by the speaker to help students cope with learning loss from the pandemic.

The Chamber has asked the General Assembly to examine possible tax relief in certain areas, including reducing the personal income tax rate and/or increasing the standard deduction and offering business tax relief including reducing the corporate income and/or franchise taxes.

Senate Minority Dan Blue, D-Wake, and State Rep. Gale Adcock, D-Wake, also spoke to the Chamber. They voiced support for Cooper’s budget proposal, which does not call for large-scale tax relief as Republicans propose, and a higher level of spending than Republicans will support. They also support Medicaid expansion and Cooper’s proposal for a $4.7-billion general obligation bond on the ballot this November, proposals Republicans have already rejected.