The following editorial appeared in the March 2011 issue of Carolina Journal.
RALEIGH — Signing Senate Bill 13 should have been a no-brainer for Gov. Bev Perdue. It passed the Senate by a 31-16 margin and the House by 66-51 vote. The new Republican leaders in the General Assembly not only gave Perdue the freedom to cut an additional $400 million in the current fiscal year at her discretion, they also redirected nearly $170 million in state funding that had been authorized but not spent.
Instead, Perdue used the first veto of the 2011 legislative session — the most substantive veto of her administration to date — defending the legacy of a convicted felon, Mike Easley. Vetoing S.B. 13 preserved the most infamous “economic development” slush funds championed by her predecessor in the Executive Mansion. By doing so, she’s upholding the Easley Way of spreading the wealth around using business incentives and other corporate welfare schemes hidden from the normal budgeting process and immune from public oversight.
These programs have used taxpayer dollars to fuel cronyism and political patronage. When the GOP legislature gave Perdue an unprecedented opportunity to reject the back-room politics that for decades defined North Carolina governance — when today’s lawmakers put the ball on the tee and gave her a free cut — she swung and missed.
S.B. 13 diverted $88 million from the annual payment the tobacco companies make to the state as our share of the Master Settlement Agreement with cigarette makers. The payments previously have gone to Golden LEAF, the Health and Wellness Trust fund, and the Tobacco Trust fund; S.B. 13 shifted that money to the state’s General Fund, where it would have been available to finance general government programs. The bill also called for another $8 million from Job Development Investment Grants and the One North Carolina Fund to revert to the General Assembly’s control.
Over the years, those programs have squandered hundreds of millions of dollars on bogus economic development schemes that have provided ribbon-cutting opportunities for politicians and well-connected campaign donors but done nothing, on balance, to improve North Carolina’s economic or fiscal climate.
When then-Attorney General Easley negotiated North Carolina’s share of the tobacco settlement in late 1990s, he urged the General Assembly to establish the three tobacco funds; JDIG and the One North Carolina Fund also were created during his tenure as governor. The boards and staffs managing these funds were stacked with political appointees — friends of the Democratic Party establishment, policy big-shot wannabes, and yes, more campaign donors.
The General Assembly needs to dust off a February 2003 memo prepared by Walker Reagan, who’s now director of that body’s Research Division. In it, Reagan concluded that the money in the three tobacco funds belongs to the state, and that the General Assembly could take the money and dissolve the funds with little consequence.
Since Perdue seems incapable of distancing herself from the programs that fueled the toxic political environment of the Easley administration, the General Assembly should cleanse the atmosphere by killing all of them.