This week’s guest columnist is Rick Henderson, managing editor of Carolina Journal.
RALEIGH — Why did it take until early August for a Democrat-dominated General Assembly with a Democratic governor to deliver a state budget that was due at the end of June?
Legislative leaders and Gov. Beverly Perdue blame the delay on the drop in tax revenues caused by the recession. And without question, it would have been easier to pass a budget had the state been flush with cash.
But as of Thursday, only two other states with fiscal years starting July 1 were without a budget. Arizona wrapped up its deal this week, even though the Grand Canyon State’s revenues plunged by 30 percent over the past year. Other states face even worse fiscal calamity than North Carolina. So what’s our problem?
You could call the budget meltdown a political failure. But it should have surprised no one. Our political system does not punish bad behavior by public officials. And the budget mess is merely the most visible example of a fractured policymaking process.
North Carolina lacks the institutional incentives (or disincentives) that punish lawmakers when they fail to govern responsibly. The price paid by politicians who don’t do their jobs is minimal.
Incumbents continue getting re-elected cycle after cycle. Districts aren’t competitive. Legislative sessions last forever — and the longer the session, the more mischief lawmakers create.
What we need is a direct check on elected officials and bureaucrats who won’t behave. It’s available in 24 other states: the initiative. Citizens should have the power to both pass laws and amend the state constitution directly if they can demonstrate grass-roots support for their causes (by collecting signatures of a significant percentage of registered voters) and then passing their measures at the ballot box.
Initiatives impose discipline on politicians who refuse to be responsible policy-makers.
It’s sort of like raising a puppy. Left to its own devices, the little rascal will make all sorts of messes, including some you can’t clean up. But routine training — and the occasional whack on the nose with a rolled-up newspaper — can lead to acceptable behavior.
Initiative states have figured this out. The wisest ones have imposed term limits on all state and local officials, so that politicians aren’t so focused on forging a career in a single office that they neglect their constituents. They’ve required their legislatures to get a supermajority vote to pass a budget or raise taxes, so that lawmakers have to occasionally say no to spending lobbies. They’ve given their governors a line-item veto, so that an elected official who represents the entire state can enforce spending restraint. They’ve set strict limits on the length of legislative sessions, so that lawmaking bodies cannot drag their feet easily.
These institutional reforms give a fighting chance to citizens who don’t want to spend every waking moment keeping tabs on their government.
For instance, Colorado, where I most recently lived, is home of the Taxpayers’ Bill of Rights, an amendment to the state constitution requiring a vote of the people before government spending can rise by more than a set formula or any “tax policy change directly causing a net tax revenue gain” is enacted by a state or local government entity.
Colorado’s income tax rate has not been raised since TABOR was adopted in 1992. Even so, residents of some cities and counties have raised local spending caps and taxes. And four years ago, voters allowed a temporary increase in the statewide spending formula, in part to finance highway construction.
And yet, Colorado maintains a healthy economic environment — and its legislature hasn’t had to bribe Apple Computer. North Carolina officials talk endlessly about jobs, jobs, jobs. But the Centennial State has the entrepreneurial climate to attract them.
Earlier this year, U.S. News & World Report said Colorado was the nation’s third-best state to start a new business. Colorado earned its grade from two studies ranking state business climates — the Small Business Survival Index from the Small Business and Entrepreneurship Council and the 2008 New Economy Index by the Kauffman Foundation. North Carolina, by contrast, scored 24th in the Kauffman index and 39th in the SBSI measure.
To be sure, initiatives do not guarantee sound governance. I’ve lived in California, after all, where many of these constraints — term limits, supermajority requirements for budgets, caps on the rate of property-tax increases — are in place. But most of California’s troubles are self-inflicted.
The Golden State passed a constitutional amendment limiting state spending in 1979 (the Gann Initiative) but voters have watered it down so often that it’s essentially meaningless. The state also passed an amendment in 1990 placing spending for K-14 public schools on a permanent escalator; this has crowded out spending for corrections and other crucial public services.
Even Colorado’s Democratic governor and legislature tried to undermine TABOR’s fiscal limits over the past two years.
So while initiatives may be a necessary step to bring government under control, they’re not sufficient. And of course, amending the North Carolina Constitution to create an initiative process would require the approval of the General Assembly. Politicians aren’t likely to give voters the means to limit the power of political insiders.
But the political class could be brought to heel if voters made the embrace of the initiative process a make-or-break priority for legislative candidates. If a significant number of North Carolinians pledged to vote against any candidate who refused to back the initiative — and some incumbents lost their jobs as a consequence — this crucial reform may take root within a few election cycles.
This year’s budget battle shows that North Carolina’s elected officials can’t be trusted with your money or your freedoms. The public needs the power to give politicians a collective whack across the nose — and the best way to do that is by allowing citizen-based initiatives.