RALEIGH – It’s a matter of priorities.
The next time your friendly neighborhood politician tells you that he or she had no choice but to raise taxes to fund critical programs – to keep schools open, to pave the roads, to lock up the bad guys – you have ever right to counterpunch with extreme prejudice (rhetorically of course).
For example, in the just-enacted 2005-07 state budget, the General Assembly included more than $2 million for a park to honor veterans in Fayetteville. Secured by powerful Sen. Tony Rand, a Cumberland Democrat, the money essentially represents a couple of million dollars that legislators didn’t use to fund school improvements, fix up decrepit state buildings, give some state employees a decent pay raise, or, perish the thought, return to the taxpayers from which it was taken.
It’s hard to justify any of the dozens of purely local, pork-barrel projects listed in the state budget, but the Fayetteville park is particularly egregious. Here are the first two paragraphs of a story in the local newspaper reporting the state grant:
The state has set aside $2.3 million for a veterans park in Fayetteville, but local officials have no idea yet where or what they want to build.
“It wasn’t something on our plate, and now it is, and that’s a good thing,” City Manager Roger Stancil said Tuesday. “So we need to start thinking about it.”
It makes you do a double-take, doesn’t it? Local officials didn’t make a formal request for the money. They don’t have a plan for how to use it. This is a funding priority for the state of North Carolina? Only in hog heaven.
On the tax side, North Carolina lawmakers were also generous – to a fault. They included a new set of tax incentives intended to lure production companies to make more films and television shows in the state. Almost as soon as the ink had dried on the gift, which comes to about $3.5 million in foregone taxes each year, lobbyists were telling the legislature that they wanted more.
Do tax incentives really impose a cost on taxpayers? Absolutely, to the extent that taxes on businesses – or more properly, on individuals to be collected by businesses – serve to generate the revenue required to cover the cost of public services consumed. A major film or TV production imposes costs on public infrastructure: on streets and highways, on public safety and fire, on school construction and other accommodations for employees and their families. Giving special tax breaks to some means sticking others with the bill.
I don’t want to leave the impression that it’s only the General Assembly and governor who set poor fiscal priorities. In Charlotte, local politicians are offering more than $100 million in tax money to build a NASCAR Hall of Fame. In Hickory, public officials have already blown through $220,000 in federal dollars and $35,000 in local revenues devoted to marketing a Delta connection from the city airport that is drawing insufficient patronage. It shouldn’t shock me if they tossed additional good money after bad in an attempt to keep the new air service going.
It doesn’t matter whether it’s state income taxes or local hotel taxes – there are many better ways to spend these dollars than the above projects, including the radical notion of giving money back to the people who earned it in the first place.
Hood is president of the John Locke Foundation.