RALEIGH — With North Carolina legislators deadlocked over a new state budget, a proverbial rabbit has now emerged from the hat of Congress, in the form of a $20 billion one-time appropriation to state governments (as part of a timely and growth-enhancing tax-cut and tax-reform package). It’s a rabbit worth nearly $500 million. And it’s not welcome.

Let me explain. The NC House and Senate acted quickly a few weeks ago in producing their respective budget plans for the 2003-05 biennium. Facing a projected gap between the continuation budget and expected revenues of about three-quarters of a billion dollars, the two chambers took slightly different approaches. The House proposed $383 million in higher taxes next year, plus a $619 million overall increase in General Fund spending. The Senate plan upped both numbers, to $500 million in higher taxes and $726 million in new spending.

Shortly thereafter, analysts at the legislature and in Gov. Mike Easley’s administration broke the news that the House and Senate budget plans couldn’t simply be reconciled into a single bill, because both had been based on rosy forecasts of revenue growth (sound familiar?). Instead of ending the fiscal year next month with a slight $114 million surplus, the state budget is now expected to require hundreds of millions of additional, emergency recissions to stay in balance. The damage includes as much as $400 million more in projected deficits in FY 2003-04.

Here’s where the Congressional rabbit hops in. North Carolina’s share of the sudden federal munificence is expected to be about $442 million over 18 months — or just enough to plug, temporarily, the new hole in next year’s budget.

Many will greet this as good news. I don’t. Congress should never have agreed to bail states out of the fiscal messes they are primarily responsible for creating. Any extra room in the tax plan should have allowed for greater tax relief. Perhaps a few states will forego tax increases of their own upon receipt of the federal dough, but I doubt it.

Instead, the federal largesse will give state lawmakers, in North Carolina and elsewhere, an excuse not to do what they should be doing for long-term solvency anyway: cut government spending. The only time politicians ever act with fiscal responsibility is when they have no other choice. Now, they will have a choice, and naturally will choose unwisely.

Hood is president of the John Locke Foundation and publisher of Carolina Journal.