It is said that the 4th century Christian scholar and theologian St. Jerome may have originated the popular proverb “Don’t look a gift horse in the mouth.” A more literal translation of his Latin prose would be “Never inspect the teeth of a horse you receive as a gift,” which better conveys the meaning of the admonition.

Since the domestication of the horse, expert buyers have assessed a given specimen’s age and condition by examining its teeth. The practice also appears to be the source of another popular phrase, “long in the tooth.” By urging those who receive horses as gifts not to subject them to standard dental examination, St. Jerome was trying to encourage gratitude and a generosity of spirit, surely good traits to display in families and private relationships.

However, it is not an appropriate rule when you are managing someone else’s affairs. By accepting a gift of property, you are accepting the responsibility of owning and maintaining that property. If someone gives you a car as a personal gift, you decline to have it checked out, and it turns out to be a clunker in need of expensive repairs, then you take your lumps. But what if you are the manager of a business and do the same thing? You have breached your fiduciary responsibility to the owners of the business.

Similarly, if you are a governor, legislator, or other state official, you do not own state government. You are a temporarily elected manager of public property. As such, you are obligated to look every gift horse in the mouth — particularly if it arrives, postage due, from Washington, D.C.

Gov. Pat McCrory and the North Carolina General Assembly were roundly excoriated by liberal activists and commentators this year for declining the Affordable Care Act’s “gift” of three years of full federal subsidy for new eligibles under the law’s Medicaid-expansion provisions. Proponents of expansion argued that because state taxpayers wouldn’t have to begin sharing the cost of the expansion for three years, it would be foolish to decline the offer. But expansion opponents, who proved to be a majority, observed that Medicaid expansion would prove a net cost to the state budget in the long run — and that even in the short run it would be irrational to participate in a scheme that spends scarce national resources in foolish ways.

The “free federal money” trick has a long pedigree in politics. During the 19th century, Whigs and Democrats competed for power in state government by making contrasting claims on the subject. Whigs wanted to spend more money on infrastructure projects but didn’t want to raise state taxes to do it. So they promised to secure free money from federal land sales. Democrats argued that Washington wouldn’t end up delivering on its promises and that the state would end up with expensive projects requiring the very higher taxes Whigs said they opposed.

The Democrats were right. Unfortunately, the pattern has persisted until the present day. Federal politicians offer “free” tax money to state politicians, who accept it to fund spending programs. Because federal taxpayers are also state taxpayers, this is a shell game designed to fool the suckers in the audience — who are depressingly numerous. Later, however, Washington gets in a cash bind and cuts back on federal funding. Now firmly established in state budgets, with employees and recipients highly motivated to defend them, the programs don’t go away. Instead, state legislators end up funding them out of state revenues, or pushing them down another level to trigger local tax hikes.

In a 2012 study published in the journal Public Choice, economists Russell Sobel and George Crowley studied a large dataset of federal grants to states as well as federal and state grants to localities. On average, every “free” grant dollar received by a lower level of government resulted in a future state or local tax increase of about 40 cents.

If you’re a taxpayer, then, you should want North Carolina officials to keep right on subjecting all federal gift horses to dental inspections.

-30-

Hood is president of the John Locke Foundation and author of Our Best Foot Forward (2012).