RALEIGH – Throughout the day Monday, there was breaking news on the two biggest political stories in North Carolina, the Easley scandal and the state budget. While distinguishable, the two stories do have a common denominator.
The current state government has a massive fiscal deficit. The former state governor had a massive ethical deficit.
These two deficits are interconnected, both in cause and in effect. The common cause was the administration of Gov. Mike Easley, which began with a series of costly tax increases and new spending programs that only served to fuel North Carolina’s boom-and-bust spending cycle. Early in his term, Easley had a chance to break out of the cycle by repudiating the expensive spending promises of his predecessor, Jim Hunt, and balancing the state budget without a tax increase.
Instead, Easley chose to follow in Hunt’s footsteps. Hunt created Smart Start, so Easley created More At Four. Hunt pushed through a massive spending program to raise teacher pay and cut class sizes, so Easley did the same. Hunt expanding the size and scope of state government, in an earnest belief that it would bring economic and social progress. Easley followed suit.
But the two governors presided over North Carolina state government at different times, and they brought different personalities to the job.
During Hunt’s tenure in the mid- to- late-1990s, economic growth and the tech-led financial bubble generated tremendous revenue windfalls to the state treasury. Hunt was a tax cutter, at least for the months just after the Republican electoral victory of 1994, while also creating huge new spending programs. He could afford to promise everyone a share of the proceeds of what seemed to be the budgetary equivalent of a perpetual motion machine. It was Easley’s bad luck to inherit the resulting fiscal mess.
As for the personalities, Hunt was a hands-on manager, a workaholic who typically knew more about the day-to-day operations of state government than just about everyone else in his administration. Easley seems to have been largely a hands-off manager, a recluse who delegated substantial authority to his aides while spending an increasing amount of his time traveling, recreating, and tending to his family’s financial future.
On policy matters, Easley’s inattentiveness cost the state a lot of money as reform initiatives in mental health, education, and criminal justice went awry. His lack of scruples about how to generate the money to fund his pet schemes led to a state lottery, corruption, and criminal proceedings. And his own private dealings with campaign donors, state vendors, and political appointees went from unseemly to unethical to politically disastrous and possibly illegal.
Is North Carolina’s state government broke because Mike Easley and his aides misspent taxpayer money on his personal travels and arranged for a cushy new job for his wife at N.C. State University? No. His personal foibles cost the state millions of dollars. His public policies cost the state billions of dollars.
Whether they realize it or not, legislative leaders struggling to balance the 2009-10 budget are nevertheless boxed in by the Easley scandal. While few taxpayers across the country relish the prospect of surrendering more of their hard-earned money to balance state and local governments, North Carolina taxpayers are angrier than most.
Taxpayers are angry that their former governor (and previous state legislatures) failed to manage tax dollars wisely when times were good. Taxpayers are angry that the former governor and his family appear to have abused their position for personal gain. Taxpayers are angry that the Easleys’ machinations have brought N.C. State into disrepute and left the university’s leadership in disarray.
They are angry, in short, not just at state government’s fiscal deficit but at its ethical deficit. If the General Assembly now sticks it to taxpayers, again, lawmakers should be prepared to see that anger intensify – and turn into action.
Hood is president of the John Locke Foundation