There have been multiple stories in recent days detailing the destructive impact that conservative budget and tax policy is having on essential public structures and services in North Carolina. During a time in which most states are rebounding and expanding public investments, North Carolina continues to muddle along and scrimp by like one of Art Pope’s weathered, low-rent chain stores.
Just yesterday, Chris Fitzsimon reported on the disgraceful situation in the Rockingham County public schools (home to Senate leader Phil Berger) while Cedric Johnson highlighted the self-inflicted budget crisis afflicting our courts system.
Now, this morning, comes an excellent editorial that sums up the absurd situation and the driving force behind it: destructive and unnecessary tax cuts. As this morning’s lead editorial in Raleigh’s News & Observer explains:
“The General Assembly’s Republican leaders appear remarkably calm about what is shaping up to be either a serious budget shortfall or an income tax shock for those who have not had enough state tax withheld.
Tax revenue flowing into the state is running about $190 million below projections following tax cuts that took effect in January. That is worrisome because state spending already is at a spartan level. There’s no slack for filling the budget hole with easy cuts. The state could dip into its rainy day fund (even though it’s not a rainy day), but that simply puts off the budget reckoning for a year.
State Rep. Skip Stam, a Wake County Republican and House speaker pro tem, said the budget shortfall isn’t much given the state’s $21.1 billion budget and the federal government’s spending on North Carolina’s Medicaid and transportation projects. He told Time Warner Cable News, ‘The difference is hardly even a rounding error.’ A rounding error? It seems like more than that to state agencies that are trying to meet the needs of a growing state. Their budgets have been tightened first by the Great Recession and then by Republicans taking control of the General Assembly in 2011.”
“Whatever the reason and the final numbers, it’s not too early to say the tax cuts are creating unnecessary headaches for state agencies and preventing investments in education, infrastructure and services for the needy. It’s one thing to be frugal about government budgets. It’s another to give money away in tax cuts when the state is falling short of meeting its needs.
Some states are struggling because of the drop in oil prices. But North Carolina has a self-inflicted problem. The national economy is improving, and states are spending more, but North Carolina keeps tightening its belt. The National Association of State Budget Officers reports that 43 states increased their general fund spending in fiscal 2015. And that’s after a healthy increase in fiscal 2014 when average state spending increased by 4.9 percent, the fastest rise in general fund expenditures since fiscal 2008.
North Carolina, by contrast, is cutting its revenue in hopes that smaller government and lower taxes will spur the state’s economy. But that result, like the missing $190 million, has not shown up.”