NC Session Offers Disappointment, Not Much Surprise

John Hood's Daily Journal: Session Offers Disappointment, Not Much Surprise


By Becki Gray, July 23, 2010
 
This week’s “Daily Journal” guest columnist is Becki Gray, Vice President for Outreach at the John Locke Foundation.


RALEIGH — During the recent legislative session, I relied heavily, as you have, on Carolina Journal, The Locker Room, and JLF policy reports and briefings to understand the debate and decisions made by North Carolina’s 50 senators and 120 House members.

In addition, in my role as the Locke legislative liaison, I spent most of my time since May 12 at the General Assembly, walking the 206,000 square feet of the Jones Street complex, monitoring meetings of the 67 legislative committees, talking with lawmakers and many of the 500 legislative staffers, and attending session on the 35 days they met (at a cost to the taxpayer of $62,500 per day, or $2,187,500 for the short session), along with 734 registered lobbyists and 93 government agency liaisons. Since the principal clerks dropped hankies and adjourned sine die at 5:30 a.m. Saturday, July 11, I’ve had time to reflect on the 2010 short session, the 876 bills considered, and the 127 new laws passed.

And here’s what I think…
I think government is too big.

In the last 15 years, North Carolina’s budget has more than doubled while population has grown only 28 percent. There are more than 661,000 current and retired state employees, all eligible for state-sponsored health insurance and pensions, both grossly underfunded. Instead of shoring up the plans, legislators added 863 new government jobs this year. Medicaid is the fastest-growing segment of state government and now consumes 16 percent of the budget. Almost 20 percent of North Carolinians are eligible to receive Medicaid. Estimates show government agencies will seek next year at least $3 billion more than the state has available from recurring taxes and fees. When government becomes bigger than the sources that pay for it, the whole system becomes unsustainable.

I think government costs too much.

This year’s final budget topped out at $20.6 billion. General Fund spending increased by $200 million when you count the $1.6 billion in federal stimulus money. (Why wouldn’t you count it?) Instead of lowering the corporate tax rate for all businesses, legislators authorized more than $350 million in new corporate welfare for targeted businesses, including a $1 million tax break for big name movie stars. There are $1.45 billion in new fees and taxes this year. Our state debt is more than $6 billion, over a third of it non-voter-approved, and service on that debt now eats up 4.25 percent of the state budget.

I think government should mind its own business.

In the ultimate nanny-state legislation, the honorables decided kids are too fat. Thus government should regulate the amount of juice kids in day care should be served and whether it should be in a cup or a bottle. The honorables wanted to outlaw 2 percent milk for children over 2 years old, as well as chocolate milk and sodas. A watered-down version of these ideas passed. Now they are guidelines, rather than mandates. But the point was made — government knows better than parents what kids should eat.

They banned the use of plastic bags in all stores in several coastal counties. They tried to outlaw country stores from making and selling peanut butter and banana sandwiches and pimento cheese sandwiches. They continued to cap the number of charter schools at 100, limiting education choices for students and their families. In spite of concerns over privacy issues, arrests for most felonies will warrant DNA collection.

Only after a very loud public outcry was a plan to use taxpayer money to fund more political campaigns for Council of State and municipal offices rejected. A two-year fight continued to wrestle a federal license for hydroelectric plants away from the company that built and owns them. Cities still have the ability to annex property owners against their will, and efforts to protect property owners constitutionally from government land grabs through eminent domain were dropped.

I think government is not being entirely honest.

Aside from the budget, ethics reform was the must-do issue of the short session. Lawmakers argued long into the final hours to pass a bill that claims to clean up bad behavior. It turns out that the final bill regulates lobbyists, contributors, and other elected officials; makes public records more accessible; and offers little additional oversight of lawmakers themselves. Efforts to expand the cooling-off period longer than six months for lawmakers who want to become lobbyists were unsuccessful, and a key provision to eliminate pay for play was dropped at the last minute.

They claimed to help small businesses while maintaining a high marginal income tax rate that affects most businesses, along with a high corporate tax rate. They offered minimal tax breaks that may sound good, but affect few businesses and actually help even fewer.

They preached open meetings, transparency, and fairness while backroom deals continued. Lengthy, complicated bills were changed with little notice and even less time to review. A budget technical corrections bill that did much more than make technical corrections was introduced in the final hours of the session with virtually no time for review. New provisions that were not included in either version of the House or Senate budgets showed up in the final budget conference report — a clear violation of legislative rules. Most bills considered were sponsored by the majority party, and most of the minority party’s bills were never heard.

Legislators loved gambling when the lottery passed in 2005 (with the tiebreaking vote cast by then Lt Gov. Bev Perdue), but they hate it now that video poker and sweepstakes have proliferated. Despite claims of the potential of 10,000 lost jobs and a $576 million revenue loss, video sweepstakes were banned. Thirty-one legislators who voted no for privately operated gambling voted yes for state-run gambling in 2005. They promised lottery proceeds would never supplant existing education spending and then passed a budget that uses lottery money to fund teacher salaries.

I think government is headed in the wrong direction.

Next year the $1.3 billion state tax increase sunsets, and the $1.6 billion federal stimulus money runs out, creating a $3 billion shortfall. The state treasurer has advised that the debt limit has been reached and that pension contributions will require $1.2 billion next year. The reserve accounts have all been drained. Lawmakers took more than $30 million out to balance this year’s budget with plans to take $152 million more if Congress doesn’t come up with FMAP money. North Carolina’s economic recovery is expected to be slow. The years of spend-and-tax ratcheting, dependence on one-time revenue to fill recurring obligations, and offering short-term solutions for long-term problems finally have caught up with us.

I think we need to change the way we look at government.

The years of excessive spending, government growth, infringement on rights, nanny-state regulation, and hollow claims of responsible governing continued during the short session and have left us with an unsustainable system. North Carolina’s tax system, which was established in the 1930s, needs to be updated. It should be fair, revenue-neutral, rooted in a respect for liberty, and dedicated to freedom of choice. Government has a role, and it’s defined in the Constitution. Growth in government should be tied to population growth. People should be given ample freedoms to make choices without government interference, and they should be held accountable for those choices, as should elected officials.

The 2010 short session was a disappointment, but not a surprise.

I think we can do better.

©2010 John Locke Foundation, 200 West Morgan St., Raleigh, NC 27601, Voice: (919) 828-3876


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