RALEIGH – If the North Carolina General Assembly was just going to end its 2007 session with a 10 percent spending increase, hundreds of millions of dollars a year in new taxes and electricity rate hikes, and more welfare for corporations and politicians, couldn’t it at least have done its damage months ago and left Raleigh? We’d have been spared a lot of overheated rhetoric and pretense.
Leaders of the North Carolina House have long opposed limits on legislative sessions, arguing that lawmakers need time to study the important issues facing a growing state. To set firm deadlines, they say, would yield power to the bureaucrats and executive branch, and lead to decisions informed more by politics than by solid evidence and careful deliberation.
Hogwash. The 2007 session demonstrates why these arguments are specious.
Take the major work of any legislature, the state budget. At the beginning of the year, leaders promised to be more responsible in fashioning the budget. But the budget bill just given preliminary approval by both chambers will raise state spending by about 10 percent – the same kind of reckless growth rate we saw in the late-1990s that led to North Carolina’s budget crisis of 2001-02 – and includes new provisions that were in neither of the House and Senate budget bills from which the new plan is supposedly derived. Contrary to the rules? Yes. Illegal? Probably. Par for the course? Yes, unfortunately.
This year would have been an excellent opportunity for the General Assembly to give state government a thorough scouring. Last year’s spending increase was also about 10 percent. Defenders of the legislature’s bumbling profligacy argue that North Carolina is a growing state, which is true, but we aren’t growing at 10 percent a year. Indeed, as I have previously observed, while North Carolina has posted significant increases in population in recent years, our economy has actually been lagging our neighbors and the nation as a whole. Our cost structure is out-of-whack – previously a low-tax state, North Carolina now has ranks above the median in government cost, and remains economically competitive only to the extent that other factors such as low unionization, affordable land, and attractive climate can compensate for government-imposed costs.
Real leadership would have meant tackling North Carolina’s fiscal challenges by setting firm priorities, eliminating wasteful spending, and embracing innovative new ways to deliver core public services such as law enforcement, education, and transportation. Instead, the political class in Raleigh took the easy way out. It has never seen a problem that could not be “solved” by taking more of other people’s money.
Viewed in tax-policy terms, the fiscal choices of the 2007 General Assembly make no sense whatsoever. By allowing the temporary income-tax rate of 8 percent to expire as scheduled while reimposing a quarter-cent state sales tax, hiking the tobacco tax again, and allowing counties to impose either another quarter-cent sales tax or a .4 percent tax on real-estate sales, the legislature has likely made North Carolina’s tax system a little less transparent (because income and property taxes are easier to perceive and measure than sales taxes are) and a little more regressive (yes, even when the value of a new, small earned-income tax credit is factored in). Yet many of the same lawmakers and activists who complain incessantly about transparency and regressivity support the 2007 budget bill and its tax provisions. As usual, the real priority is confiscating more money from the private sector to spend in the public sector. Plenty of people in Raleigh believe this to be in the best interest of the state, by which they mean North Carolina, though in reality it is merely in the best interest of the State, meaning those who derive their power and income from state government.
As far as I’m concerned, there is no surprise here. My frustration comes primarily from the sheer waste of the session itself. Surely, if the legislature is just going to write sloppy laws, raise taxes, and toss around goody bags to fellow politicians and special interests, it shouldn’t pretend to be engaged in a deliberative process. Just come into town, blow through other people’s money, pose for the cameras with some senseless environment bills, and then go home. Okay?
Hood is president of the John Locke Foundation.