What a difference a biennium makes.
Two years ago, newly elected Gov. Mike Easley stood confidently before a North Carolina General Assembly run entirely by his own political party, gave his State of the State address with good-natured humor and few diplomatic overtures, and devoted much of his speech and energy to selling a state lottery. The governor’s speech was full of Democratic boilerplate language about “investing in education” and “moving the state forward.”
This year presented a different tableau. Easley came into the legislative chamber Monday night with, I thought, a bit more nervousness. His administration had spent the past couple of weeks telegraphing the governor’s intention to challenge the General Assembly with ideas, such as a statutory cap on state spending and a line-item veto, that would necessarily limit their discretion and power. This time around, there were many more Republicans in the chamber – and most of them had been elected running against Easley’s previous two years of tax increases, distant leadership, and the swapping and swiping of various “trust” funds.
The political changes since 2001 haven’t escaped the governor’s notice. He began his State of the State Address by recognizing the unprecedented co-speakership arrangement in the N.C. House and urging lawmakers of both parties and chambers to make the arrangement work. Then, Easley spent about half of his speech repositioning himself along North Carolina’s political spectrum as a strong fiscal conservative.
This required no small measure of revisionism and spin. So, for example, he argued that under his leadership the state had avoided the fate of dozens of other states that face budget deficits through June. OK, but North Carolina’s budget is “balanced” only because of short-run gimmicks and “temporary” tax increases that Easley now wants to make permanent, contrary to his previous promise. Starting July 1, the state budget goes back into the red, big time. Few states have experienced four straight years in which deficits have cropped up either at the beginning or end of the budget process. North Carolina has nothing to be proud about.
Speaking of tax increases, remember the more than $1 billion in hikes that Easley has proposed or signed over the past two years? Apparently he doesn’t. “We balanced our budget by cutting more than $1 billion a year and we reduced the state operating budget for the first time in 33 years,” he said. No mention of the higher taxes North Carolinians are paying on their personal income, the higher taxes on retail sales, higher taxes on businesses and consumers, higher property taxes because of the governor’s withholding of local tax reimbursements.
I don’t mean simply to complain about the governor’s fiscal amnesia. It seems to have been accompanied by some welcome fiscal analgesia. Easley now feels our pain on taxes. His rhetoric about the “overspending” of past legislatures was caustic – but still drew the strongest applause from lawmakers of the entire night, though for some it was obviously mixed with a sort of ironic amusement. The governor made a strong case for his spending cap and line-item veto. He called for long-term thinking about the state’s spending habits. He promised (albeit misleadingly) that his budget would have “no tax increase,” and noticeably said nothing about his own study commission’s proposals to boost revenue by expanding retail taxes to include services.
Yes, he went on to restate his lottery position – even supplementing the advance copy of his speech with some extra flourishes about how not funding school construction would be more regressive than funding it with a lottery – but it was comparatively an afterthought. Yes, he made some glancing references to the scandal-ridden Golden LEAF Foundation and the state’s new corporate incentives/socialism program. And yes, he once again argued that programs such as More At Four and class-size reduction were “investments” worth making. But by and large, Easley’s speech tacked conservative. It was strikingly dissimilar in content and tone to his first State of the State. And though delivered with a smile, and with more diplomacy than his first, poorly written address, Easley’s speech was designed with a few rhetorical shots across the bows of the state legislature, which he knows is less popular with North Carolina voters than he is.
“I promise you that the first unbalanced budget or reckless spending bill sent to me will be vetoed the minute it hits my desk,” thundered the newly Reaganite Easley, who, it is obligatory to point out, has previously proposed and signed unbalanced budgets.
Perhaps he should have concluded with: “And tell them to go out there with all they got and win just one for the Flipper.”
Hood is president of the John Locke Foundation and publisher of Carolina Journal.