RALEIGH — North Carolina’s fiscal debate may finally come to a head on Monday.
State senators are expected to use a Monday afternoon public meeting to release the Democratic majority’s latest proposals for closing budget deficits for the next two fiscal years. The talk around Raleigh is that these proposals could include a state-run lottery in the second year of the budget biennium, additional taxes on cigarettes or alcohol, or maybe both.
Speaker Jim Black says that there are not enough votes in the NC House to tack on a state lottery or more tax increases to a 2003-05 budget that already includes nearly $400 million in higher taxes (the House version) or $500 million in higher taxes (the Senate version). But Black, and other legislative leaders, say a lot of things. I’ve come to learn that you should wait and see what happens in the course of political events rather than believe the stated “predictions” of lawmakers who are themselves trying to shape the course of those events.
Viewed through a no-spin lens, the legislative situation is far more unsettled than is commonly thought. In the House, there is a deep divide between the Republican caucus, most of whom are conservatives who oppose government gambling monopolies or a higher tax burden, and the Richard Morgan/Harold Brubaker faction of moderates who seem more open to persuasion on both. Allied with the second group is a handful of GOP freshmen who were elected last fall as fiscal conservatives but who also gave Morgan the votes he needed to be elected co-speaker early this year. Anyone who says he can confidently predict how these freshmen will vote is spinning a tale (or, perhaps, winning a sale).
On the other side of the aisle, there are several liberal Democrats whose influence in the House has been limited this year but who don’t like regressive taxes, either on goods or on lottery tickets. If it comes down to a close vote, they may ally with the Republican majority to defeat a lottery or tax hike — or they may vote in favor, having wrung a concession out of Black on welfare programs or college funding.
And in the Senate, don’t for a moment believe the notion that Democratic leader Marc Basnight can have whatever he wants on these issues. Anti-lottery activists have long said that a vote in the Senate could be surprisingly close, with several Democrats joining virtually all Republicans on the “don’t bet on it” side. And more taxes could be a tough sell for a few Senate Democrats who find themselves in unsafe districts (though the prospect of redistricting could alleviate their heartburn a bit).
With revenue collections continuing to fall short, the ill-advised congressional bailout of states lasting only one year, and hyperbolic claims about our “gutted” state government poppping up all over the place, I think that the environment may be congenial for a serious political push for bigger government. It won’t make sense as policy — hello, North Carolina’s economy has fallen into a deep pit, please stop digging — but that’s not the point. My organization has published copious information on why the state government shouldn’t run a lottery and why we don’t need higher taxes to fund legitimate state services. Others have pitched alternatives, too.
Again, watch what politicians say and do when it counts, not what they say ahead of time that they will say and do. OK, so it’s not quite as elegant as a Cole Porter lyric, but you get the idea.
Hood is president of the John Locke Foundation and publisher of Carolina Journal.