The words “ambitious state budget” must test well in polls and focus groups.
At least that’s what one might presume after hearing left-of-center politicians and pundits repeatedly describe North Carolina’s latest General Fund budget plan as “not ambitious.”
Unable to rely on old standby clichés such as “draconian cuts” or “risky schemes,” critics have latched onto a lack of “ambition” as their chief complaint about the $22.3 billion General Fund budget signed into law for 2016-17. The proof? Its spending increase isn’t large enough.
Building up the state’s savings reserve account? Adding more relief for the vast majority of taxpayers who rely on the income tax’s standard deduction? Not as high a priority, so the argument seems to go, as increasing government spending.
That’s despite the fact that the budget builds in a 2.8 percent spending hike. Plus much of the increased spending is devoted to a goal policymakers of all ideological stripes have touted: Raising pay for public school teachers. Pay climbs by an average of 4.7 percent in the budget plan, and some teachers will see much larger increases.
Webster’s Encyclopedic Unabridged Dictionary defines ambition as “an earnest desire for some type of achievement or distinction … and the willingness to strive for its attainment.”
It’s not entirely clear to this observer why a budget, a document devoted primarily to the dollars and cents of running state government, ought to exhibit ambition at all. Several other characteristics would appear more prominently.
Take “balance.” Not only should a state budget spend no more than available revenue can accommodate — as our state constitution requires — but a budget exhibiting balance also weighs today’s needs against those of the unforeseen future. Such a budget builds in safeguards designed to help the state weather its next literal or figurative storm.
“Frugality” also comes to mind when considering qualities that characterize the best budgets. If money flows into state coffers at a higher-than-expected rate in one year, there’s no particular reason to seek ways to spend that windfall.
North Carolina is sure to follow the nation’s lead and plunge back into recession at some point in the future. Plus the upcoming 20th anniversary of Hurricane Fran ought to remind us of the ever-looming threat of a costly natural disaster. Overspending now would lead inevitably to spending cuts or tax increases down the road when the revenue flow tightens up.
We’ve seen that movie before. Its ticket is a little too pricey.
“Predictability” might not come to mind immediately as a quality inherent in a good budget, but there’s something to be said for limiting the number of major, sweeping changes that take place at once. Even when a Republican moved into the governor’s mansion in 2013, giving the GOP control over both the executive and legislative branches for the first time in memory, the first state budget that followed such a major political shift followed some familiar patterns.
Yes, Republicans made sweeping tax reforms that year. They reduced corporate rates and replaced a tiered personal income tax structure with one flat rate. Yet anyone familiar with the longstanding state budget process would have recognized the first state budget tied to those reforms. Existing budget categories remained in place. Budget writers stuck with their standard committee and subcommittee processes. Lawmakers even built in a spending increase as they sliced tax rates.
Basically, Republican budget writers have placed North Carolina’s spending pattern on a new trajectory. Rather than combine years of overly large increases with years of retrenchment (or years of raising taxes to cover the overspending), the current legislative leadership has aimed at smaller, more predictable spending increases.
It’s a path that’s less likely to overextend state government. It’s a path that’s less likely to force tough decisions in the future between large spending cuts and higher tax rates.
Perhaps the issue of the new budget’s “ambition” is misstated. For those who define “ambition” as spending growth untethered to fiscal reality, then the 2016-17 document clearly lacks ambition.
But for those who see an “earnest desire” to build balance, frugality, and predictability — some might say “conservative” traits — into the budget process, along with the “willingness to strive for” those goals, then the budget has all the ambition it needs.
Mitch Kokai is an associate editor of Carolina Journal.