Back in February, Gov. Mike Easley emerged from his hole, felt a bitter chill in the air, and didn’t see his political shadow. After Republicans surged to victory in the November elections (yes, they bungled power away later on), Easley’s first two years seemed to have been repudiated by voters looking for more fiscal discipline and more assertive leadership.
Now, Easley is more than half the way there. He’s asserting leadership by proposals on highway construction, spending restraint, and a line-item veto. And judging by his new 2003-05 budget plan, his recent rhetoric about fiscal restraint does reflect some serious consideration of how best to shape up North Carolina’s bloated government.
The plan includes hundreds of millions of dollars in welcome savings in such areas as Medicaid reform, UNC research subsidies, non-teaching positions in public schools, and administrative costs in numerous state agencies. It phases out funding for the ridiculous Global TransPark project. It wisely suspends capital projects that don’t meet the test of a high priority in an economic slump, such as the Clean Water Management Trust Fund.
On the other hand, Easley 2003-05 budget stumbles in two important areas. First, it includes yet another round of costly tax increases. This time around, the trouble lies in the so-called “temporary” tax increases he and the General Assembly passed over the past two years. Some $460 million of higher income and sales taxes were supposed to disappear this year, but now the governor wants to retain the sales tax hike until mid-2005 and the income tax hikes until 2006. This will cost taxpayers dearly over the next two years, and will cost Easley some of his new-found political credibility every time he claims his move isn’t a tax increase. If you change policy and the result is for taxpayers to pay substantially more in taxes than they otherwise would have, you have just substantially raised taxes.
Governor, your argument here is with the English language, not the Republicans.
The second major stumble is the state lottery. Yes, I know you’ve heard that Easley wasn’t going to include it in his General Fund budget. Nor did he. But what he did do was propose nearly $60 million a year in transfers from state accounts that currently fund local school construction. The money goes to pay for local school operations, surely a noble and constitutional purpose, but the point is: how are these mostly poor counties supposed to make up the difference? Well, it turns out that the latest version of the governor’s “Education Lottery” would provide school-construction dollars to many of these same districts.
That’s not cricket.
Hood is president of the John Locke Foundation and publisher of Carolina Journal.