RALEIGH – After months of allegation, investigation, argumentation, and fulmination, legislative leaders announced just before the state of the 2006 legislative session that the North Carolina General Assembly would reform its budgetary process. Rather than conduct deliberations in secret, stick in pork projects and major policy changes without public debate, and spring the final product on rank-and-file lawmakers with just hours to scan the document, the leaders said this year’s state budget would be better.

They were right. It has been a little better. While most of the major decisions were still obviously discussed and completed in secret, both the Senate and House budgets have contained or will contain fewer specified pork projects and provisions than in the past, along with a bit more time for lawmakers to study the bills. We are far from a budget process truly worthy of celebration – or even a process as open and participatory as was typical a dozen years ago – but baby steps still constitute locomotion.

If what I’m hearing is correct, however, the 2006-07 budget plan now being debated (the House will act this week on its version, the Senate having already done so) isn’t really the 2006-07 budget plan. It is the first of two planned spending bills. The second bill, I’m told, will contain selected projects taken from the specific spending requests contained in all those separate bills representatives and senators have filed this year.

In other words, what lawmakers and Gov. Easley will do first is enact a beans bill. Then will come the pork.

My intelligence could be faulty. But I’ve heard it from multiple sources, Republican and Democrat, inside and outside government. One version is that legislative leaders have been calling individual members in and making clear, in no uncertain terms, that if the member wants his or her pork project inserted in the second bill, it will happen only after the member votes for the first bill – the bill that will by itself raise state spending by about 10 percent, leave at least some of the “temporary” taxes in place that were supposedly necessitated by fiscal deficits, and funding hundreds of millions of recurring expenditures with non-recurring funds (a practice that often leads to future tax increases, and that JLF has criticized since our inception 16 years ago).

What I don’t yet comprehend is how this pork & beans budget plan works as a political strategy. A couple of possibilities suggest themselves:

• Perhaps the second bill will also contain measures that would be so popular, at least among state legislators, that they can’t imagine voting against it. Examples might include the minimum-wage increase or a new incentives package for a big company promising thousands of new jobs.

• Perhaps the passage of the second bill isn’t really the point. Having convinced both Democrats and many Republicans to vote for the initial spending bill, and thus arguably removing it as an issue for the fall elections, legislative leaders may want only to help members demonstrate dutiful concern for all the worthy causes and projects that didn’t make the cut. To voters who care more about fiscal responsibility than scamming the rest of the state out of dough, members can correctly point out that that pork-laden bill didn’t pass. But to voters who believe budgeting is all about maximizing their district’s take at the expense of others, members can say that they obviously tried to do it, and will keep working on it if re-elected.

I can imagine these scenarios, but I frankly see neither as working out the way leaders may desire. This year’s budget isn’t likely to be the subject of big political debate anyway – it will be the 2005 budget, which clearly included tax hikes and wasteful spending, that will be cited in critical ads and mailers.

Help me out, CJO readers. What am I missing?

Hood is president of the John Locke Foundation.