On Monday night, millions of North Carolinians went to bed desperately fretful about the future of their state’s economy. Tossing and turning all night long, they worried in particular about what their state lawmakers in Raleigh were up to. Surely, they thought, the General Assembly wouldn’t wait another day to try to spend some tax money. Surely legislators wouldn’t be foolish enough to conserve enough state dollars to allow high sales and income-tax rates to expire next year as scheduled.
“Don’t give our money back to us,” they pleaded. “What are we supposed to do with it? Buy goods and services? Save it? That won’t help the economy!”
Hoping against hope that their elected politicians would act without delay to hurl subsidies at large private corporations and cash-flush public universities, North Carolinians arose Tuesday morning and turned their eyes longingly to their beloved state capital. “Before the end of the day, without any warning or serious debate,” they prayed as one, “won’t you please vote to commit the state to spending hundreds of millions of our dollars?”
Their prayers were answered. At breakneck speed, the North Carolina Senate first convened two committees and then held a brief floor debate before voting to issue $240 million of state debt without a public referendum to build a stroke-research center at East Carolina University and to renovate a cancer center at UNC-Chapel Hill. Not to be outdone, the House Appropriations Committee voted to approve an “emergency” deposit of $20 million into Gov. Mike Easley’s cash-grants fund for industry and another $4 million for “emergency” job-training subsidies.
What was the hurry? Sen. John Kerr, the Goldsboro Democrat who was a key proponent of the UNC debt bill, argued that the bonds needed to be issued within the next couple of weeks to minimize the interest rate. Over in the House, according to Rep. Bill Owens, “everyone is spreading the rumor that North Carolina is not open for business. The fund is empty. This bill means that North Carolina will be open back for business.”
A few malcontents tried to slow things down. Some argued that committing such large sums of taxpayers’ money to such
a narrow range of uses was precipitous given that the other, broader needs of the state had yet to be debated by either chamber of the legislature in 2004. Others wondered why the two medical centers — presumably in line to attract many, many millions of dollars in research grants and insurance payments for services delivered — could not simply finance the debt with revenues instead of asking taxpayers for an annual subsidy that will top out at $25 million. And a few even had the temerity to suggest that proceeds from the national tobacco settlement, intended to remedy the health effects of smoking, be used to finance cancer and stroke research and treatment at the universities.
But the critics ran out of time. That whooshing sound you heard Tuesday evening was the collective sighs of millions of your fellow citizens, relieved and thankful that the billions of dollars in state bonds already issued to finance UNC buildings in the past three years would be augmented by another quarter-billion — and that they wouldn’t have to be bothered with voting on the new debt. And that other, creaking sound you heard was the direction of a $276 billion state economy being shifted overnight by the prospect of another $20 million in corporate subsidies. “Now,” marveled business executives across the world, “North Carolina is back in business.”
Hood is president of the John Locke Foundation and publisher of Carolina Journal.