RALEIGH – About the dueling protests this week on North Carolina taxes and spending, one can observe some similarities.

Both events occurred at the Legislative Building in Raleigh. Both focused media and public attention on the yawning budget gap the General Assembly will have to close for the fiscal year that begins July 1. And both featured impassioned speeches about the budget.

But the similarities end there.

On Tuesday, representatives from some 80 nonprofits, spending lobbies, and left-wing groups held a press conference to state their opposition to a developing House version of the 2009-10 budget that would close the deficit without a tax increase. The liberals argued that unless the spending cuts are “balanced” with tax hikes (though they preferred the euphemism “more revenues”) the state’s progress would be set back by decades. Some predicted widespread social upheaval and even dead bodies if the legislature failed to raise taxes.

On Wednesday, approximately 3,000 taxpayers from across North Carolina gathered outside the building to oppose new taxes and demand fiscal restraint and accountability from their elected officials. The conservatives participating in this “Take Back Our State Tea Party” argued that the escalating government budgets of the past two decades were never a sign of North Carolina’s “progress” but were instead evidence of North Carolina’s descent into fiscal recklessness, public corruption, and economic stagnation. Recognizing that households and businesses are already suffering income and job losses due to the recession, protesting taxpayers said it was time for government agencies to bring their spending appetites in line with economic reality, too.

Indeed, the fundamental difference between the two messages is realism. The liberal press conference lacked it. The conservative protest exemplified it.

The reason why many Democratic members of the NC House are loath to recommend a tax increase is that, realistically, it won’t help the budget picture very much – but it will hurt the economy and their own political prospects, perhaps by a lot.

If you measure the budget deficit as the gap between the General Fund budget originally authorized for the current fiscal year and how much revenue will come in next year at current tax rates, that figure is well over $4 billion – or about one-fifth of last year’s budget.

Even the most extreme left-wing proposals to raise income, sales, or excise taxes would bring in only a small percentage of the money needed to close this deficit. The NC Senate’s proposed tax increase, for example, would have upped revenue collections by about half a billion dollars a year. While dampening the economic recovery a bit, and angering taxpayers a lot, it would leave the vast majority of the deficit untouched. Significant budget savings would be needed, anyway, including such policies as repealing class-size reductions and eliminating non-teaching positions in the public schools, reining in North Carolina’s Medicaid program, closing low-priority government facilities, and cutting state subsidies for many nonprofits and local programs.

It is entirely rational for state lawmakers, including liberals in the Democratic majority, to question whether such a “balanced” policy makes any sense in the current economic and political climate. Inescapably, the main solution to North Carolina’s fiscal woes will be to cut the state budget to bring it in line with expected revenue.

That’s how households and businesses have to respond to their budgetary problems. They don’t have the luxury of compelling others to cover their deficits. Actually, they often find it necessary to reduce their prices during recessions – for households, that can mean seeking reemployment at a lower wage, for a time – in order to make ends meet.

For North Carolina, home to one of the worst-performing and least-competitive economies in the United States, now is certainly not the time for the legislature to raise the price of living, working, investing, visiting, or creating jobs in our state. That’s the message that thousands of taxpaying citizens sent their lawmakers this week.

Let’s hope the message was received.

Hood is president of the John Locke Foundation