RALEIGH – When over the weekend Gov. Mike Easley complained that negotiators at the General Assembly were turning “deaf ears” to his budget ideas, he intended to be critical of the lawmakers. But the statement can also be read as an indictment of his own clumsiness and lack of engagement.
Easley is right to urge state legislators to consider the likelihood of weak revenue prospects in fashioning a 2008-09 budget plan. If state revenues in the current fiscal year are running $70 million lower than projected, that’s not a particularly large difference in the context of a $21 billion General Fund. Still, it’s a sign of trouble. Revenue softness now could create a more-substantial gap later.
The problem is that Easley’s argument for fiscal restraint lacks consistency and credibility. While criticizing the legislature’s tentative agreement on a tiny $31 million tax-relief package for 2008-09, Easley continued to call for higher teacher-pay raises with a far-higher fiscal impact. He even had the audacity to claim that “teachers get shafted” in the House and Senate budget plans, though teachers would in fact get roughly a 3 percent boost. That’s the same average pay raise that other state employees would get. Easley had wanted to give teachers a 7 percent raise and, if we’re going to use the term this way, give other state employees the shaft.
As for the governor’s credibility as a champion of fiscal propriety, it appears to have flown out the window somewhere between Southport, St. Petersburg, and the Sabine Hills.
The governor’s new proposal is to nix the $31 million in tax relief and transform the pay raises so that employees get a flat 3 percent, rather than the legislature’s proposal for a 2.75 percent raise or $1,100, whichever is higher. He says the change would save $25 million, freeing up a total of $56 million next year to help offset any slack revenue growth. But there is no shortage of ways to save $56 million, or several times that amount. North Carolina’s state government remains expensive, expansive, and in many cases ineffective. Fiddling with average pay-raise percentages is about as far removed from leadership as one can get, given the opportunities for reforming government and the stakes if we don’t.
Are legislative leaders any more willing to delve deeply into the state’s continuation budget to make fundamental, lasting changes? Unfortunately, no.
Whatever the outcome of this week’s negotiations, the 2008-09 state budget will grow slower than it has in a long time. Slower, indeed, that most versions of a Taxpayer Bill of Rights would have allowed. Good. But by again kicking the can down the road on structural reforms and issuing more than a half-billion-dollars in new state COP debt without a vote of the people, the General Assembly and the Easley administration will be saddling the next governor – whoever he or she may be – with an expensive debt load and a lot of unfinished business.
And then the whole process will start again.
Hood is president of the John Locke Foundation.