RALEIGH – There is reportedly at least a $1 billion hole in North Carolina’s 2005-06 state budget. It reflects expected growth in current programs (called the continuation budget) and the scheduled expiration of about half a billion dollars in higher sales and income taxes originally imposed in 2001. But around the state capital, the budget-deficit talk is getting more and more outlandish.
It’s a $1.5 billion deficit, someone told me confidently the other day. On “N.C. Spin,” my lefty sparring partner Chris Fitzsimon and former House Speaker Dan Blue have both projected the gap at $2 billion. As the auctioning continues, I won’t be shocked to see lobbyists for more of other people’s money bidding the number up more.
It may seem that these figures are being plucked out of thin air, but that’s not quite fair. They reflect the addition of new spending of various kinds that commentators view as mandatory, or at least greatly desired. I’d offer a blanket condemnation of the practice if it were not for the fact that even the “official” estimates of the budget deficit include items that aren’t, strictly speaking, part of continuation. These would include spending to cover expected increases in higher-education enrollment (it is treated differently than K-12 enrollment growth) and the assumption that state employees will receive at least a small raise.
Still, the problem with all this willy-nilly widening of the state budget hole is that there is no logical end to it. Obviously lots of different interest groups are convinced that their favorite program is absolutely essential, and indeed that it needs significantly more funding just to “catch up” after years of cuts (that sound you hear is my indignant snort). If you lent such claims credibility, they could well push the budget deficit well above the $2 billion mark.
Then there is the matter of legal requirements. For 2005, the main one people are talking about is the Leandro mandate to provide adequate funding to all school districts in the state to meet their constitutional obligation to provide opportunities for a sound, basic education for every student. Some education leaders would like to see the state add at least $200 million to the more than $6 billion in state funds already devoted to public-school funding.
However, there is no legal mandate to take more of the taxpayers’ money for public schools as long as they are funded and operated in the current manner. That is, we already know of hundreds of millions of dollars of state expenditures on public schools that have no demonstrable relationship to student performance.
For instance, taxpayers are compelled to spend tens of millions of dollars to encourage teachers to obtain graduate degrees and national board certification. Clearly in the first case and arguably in the second, this does little to improve teacher quality. Another good example is the nearly $400 million in state funds going to teacher-assistant positions. The same research suggesting academic benefits from class-size reduction also shows that adding assistants to the classroom has no measurable effect on student performance (a point made just the other day in Greensboro by one of the class-size researchers).
If even a portion of these misdirected funds were redirected into state grants to school systems based on poverty status or at-risk students, or to districts willing to differentiate teacher pay based on individual responsibilities and performance, then state leaders would go a long way towards meeting their responsibilities to North Carolina children. Indeed, one might say that they also must meet a constitutional responsibility to taxpayers to minimize the size and cost of government (Article 1, Section 1). These duties are compatible.
Hood is president of the John Locke Foundation and publisher of Carolina Journal.