Opinion: Daily Journal

Budget applies constructive conservatism

The N.C. House of Representatives (Image from YouTube)
The N.C. House of Representatives (Image from YouTube)

When then-Congressman Jim Martin ran for governor in 1984, he sought to combine Reagan-era thinking about free markets with the practical approach to government he’d learned two decades earlier as commission chairman of North Carolina’s most-populous county, Mecklenburg.

Like many other southerners of his generation, Martin had switched from Democrat to Republican because of his belief that Washington was doing too many things that the Constitution had properly reserved to states, localities, and the people themselves — and that, not coincidentally, Washington was making a mess of them. But simply opposing federal encroachment in such areas as education and transportation wasn’t sufficient, he knew. Republicans needed a vision for how states and localities could deliver these services effectively.

A victorious Martin would eventually call his philosophy “constructive conservatism.” I think that’s as good a label as any to affix to the state budget just passed by the Republican-led General Assembly and signed by Democratic Gov. Roy Cooper.

The conservative elements are unmistakable. State spending will, once again, grow no faster than the combined rates of inflation and population increase. The budget initiates another round of pro-growth tax cuts that, when fully implemented, will reduce our tax rate on personal income to 3.99%, down from 5.25%, and eliminate our corporate tax altogether.

That’s the overall architecture of the new budget, and it counts as a significant conservative victory. So does the budget’s expansion of the Opportunity Scholarship program for families choosing private schools for their children. Regarding the constitutional separation of powers, the bill clarifies that the governor does not possess the unilateral power to declare perpetual emergencies. After 30 days, an emergency declaration goes away unless extended by a vote of the Council of State. The bill also clarifies that the attorney general cannot encroach on legislative prerogatives by purporting to “settle” lawsuits against the General Assembly to achieve a policy outcome that the attorney general may like but lawmakers do not.

At the same time, North Carolina’s new spending plan directs money to high-priority functions and agencies of state government. Public employees truly needed raises, of course, and some of the biggest increases went to areas where recruitment and retention problems pose grave risks to the public, including probation, parole, and corrections officers.

Several years ago, the legislature created the NC Promise program to foster enrollment growth at Western Carolina University, Elizabeth City State University, and UNC-Pembroke by capping tuition at $1,000 a year for in-state students and $5,000 for out-of-state students. The concept resembled an idea championed years before by the aptly named James G. Martin Center for Academic Renewal: creating tuition tiers to distribute students and programs more efficiently and equitably across the UNC system. The new 2021-22 budget adds a fourth campus, Fayetteville State University, to NC Promise.

Perhaps the most “constructive” part of the new spending plan is how it makes use of billions of dollars in one-time money — federal dollars, reverted funds, and revenue collections — that a less-responsible General Assembly might have used to fund the ongoing operations of government. When you pay for recurring expenses with a windfall, you guarantee either an imperiled program or a tax increase.

Instead, the legislature put $6 billion over the next two years into the State Capital Infrastructure Fund (SCIF) as well as directly funding hundreds of millions of dollars in additional projects. Lawmakers also added $3.1 billion to the state’s rainy-day fund, $800 million to a separate reserve for emergencies and natural disasters, and $50 million to a savings account for future health-plan expenses.

While I’m not sold on all the capital projects fund by the new budget, most appear to fund the construction or renovation of valuable infrastructure. Practitioners of constructive conservatism have always recognized the importance of investing in capital assets that move people, freight, energy, and information or that facilitate the delivery of critical services.

Monopoly, waste, and excessive debt are what such conservatives oppose. The new budget reflects their values.

John Hood is a Carolina Journal columnist and author of the new novel Mountain Folk, a historical fantasy set during the American Revolution.