Will They Tax Themselves More?

This week’s “Daily Journal” guest columnist is Donna Martinez, Carolina Journal Radio co-host and Right Angles blogger.

RALEIGH — If you think the debate over state priorities and spending has been loud thus far, just wait for the reaction from the spend-and-tax lobby to a recent proposal from the General Assembly. If it becomes law, the plan would give North Carolinians a way to donate money to the state, above and beyond their tax bill.

The proposal couldn’t come at a better time. For months now we’ve heard cries about the need for more public “investment.” That’s code for more money for new or expanded government programs and services, and jobs to administer them. Special interests ranging from teacher associations to social justice groups have descended on Raleigh to demand that, at the very least, their piece of the public pie be spared the fiscal knife.

This week the head of the N.C. NAACP took special-interest demands to a new low, yelling at legislators from the gallery while lawmakers were in session. He was arrested.

The self-indulgent calls for cash have become a habit for many advocates, despite a roughly $2 billion budget hole facing the General Assembly’s new leadership. The gap between anticipated revenue and spending — created in large part by North Carolina’s decades-long pattern of spending and taxing under previous legislatures — can rightly be called a fiscal crisis. And it can’t be ignored, thanks to a state constitutional requirement that the budget be balanced.

Advocates’ lack of acknowledgement of the crisis makes this year’s spending demands even tougher to swallow. These very advocates fail to appreciate the taxpayer support from which they’ve consistently benefited over the years. There is no disputing that, adjusted for inflation, General Fund appropriations per person grew by a hefty 79 percent from 1980 to 2010.

Yet, according to the stream of advocate rallies and news conferences held at the legislature, there’s still not enough money and the new Republican-led General Assembly isn’t listening to the people.

In fact, the General Assembly is not only listening, it’s acting.

House Bill 877, titled Check Off Donation: Government Funding, would allow state income tax filers to earmark their refunds — any portion or all of the amount expected back from the state — into six specific government bank accounts. There’s something for everyone in this plan, and as the spending advocates like to say when they argue for higher taxes, no one will miss the refund because they’ll never see it.

Arts lovers could contribute to Cultural Resources. Mental health advocates could supplement Health and Human Services. Those who say the state must have more teachers, classroom assistants, and technology could fatten the Public Instruction checkbook. Law and order proponents could contribute to the Public Safety budget. Those who believe the state’s future rests with the University of North Carolina can champion the system. Can’t decide among all the options? No problem — make a deposit to the General Fund.

The idea of a voluntary fund isn’t new. The federal government has accepted donations for more than 160 years, calling them “Gifts to the United States.” The Treasury Department website says the fund was created to accommodate “individuals wishing to express their patriotism” for the country. Fiscal year 2008 was a banner year for the feds. Gifts totaled $3,735,934.74, according to Tom Longnecker of the Treasury Department. In fiscal year 2010, the number dropped to $698,708.40. From fiscal year 2006 through fiscal year 2010, the account took in more than $9 million.

If North Carolina’s cadre of spending advocates are intellectually honest, they’ll welcome the opportunity to restore “investments” they’ve spent months arguing are being unfairly cut by budget writers. The fund also would showcase advocates’ clout in a way rhetoric, rallies, and arrests never can match.

H.B. 877 could give the big spenders the most influence they’ve ever enjoyed. The question is: How many of them will engage voluntarily in the wealth transfer they’re so eager to impose on others?

You can bet they’re sweating the answer to that question.