JOHN HOOD: A Welcome Back to the Legislature
In the spirit of the present moment, as one filled with hopeful audacity and bedazzled by gleaming rainbows extending from the inexhaustible federal treasury in Washington to every corner of North Carolina, I'd like to welcome the General Assembly back to Raleigh for the start of its long 2009 session.
Ladies and gentlemen of the House and Senate, there is plenty of important work to be done. But I'm sure you're up to it. The good news is that by setting priorities and meeting deadlines, you should be able to wrap it up long before the start of the 2009-10 fiscal year.
(The bad news is that you probably won't, but we won't hold it against you this year. Just make good decisions.)
Everyone is telling you that the vast majority of your time this year will be consumed with trying to balance a state budget socked by weak revenues, escalating spending demands, and the need to clean up costly mismanagement of the state's mental-health programs, probation system, and physical plant.
Everyone is right. The budget hole may well exceed $2 billion. You can cover part of it in the current fiscal year with rainy-day reserves, and Congress may issue the bonds you are constitutionally enjoined from issuing to finance ongoing state operations with debt.
But the gap between expected revenue and desired spending will persist for several years. You'll have to enact some lasting budget savings to bring the numbers into balance. They'll make some powerful state constituencies angry.
But raising taxes in the midst of a severe economic recession would be both penny-foolish and pound-foolish. Higher income or sales taxes will discourage work, investment, and entrepreneurship. Higher excise taxes on cigarettes and alcohol will unfairly saddle less-affluent North Carolinians with the responsibility of financing state government, while keeping state government in the nanny business. Besides, even large hikes in these excises won't bring in much money. Whether you like it or not, the 2009 budget debate will largely be about controlling costs, reducing redundancies, and ending some state programs altogether. There is no practical alternative.
Now, that's not to say that the 2009 legislative session must be entirely devoted to budget-saving ideas. The General Assembly can make progress in other policy arenas as well, by embracing innovation, competition, personal freedom, and personal responsibility. Here's a short list of ideas worth considering:
-- Take Gov. Beverly Perdue's idea of "Google government" and run with it, by putting the state's checkbooks online and finding other ways of making state and local government more transparent.
-- Pass a bill requiring the Department of Public Instruction to purchase a nationally normed test to replace the state's troubled standardized-testing program.
-- Enact real reform of teacher certification to invite thousands of talented, knowledgeable North Carolinians -- many now finding themselves back in the job market -- to teach in state public schools without having to complete largely irrelevant education coursework.
-- Lift the statewide cap on charter schools. It will save taxpayer money and allow the best charter schools to clone themselves into underserved counties and neighborhoods.
-- Enact whatever legislation will help Health and Human Services Secretary Lanier Cansler straighten out the mental-health mess, including changes in reimbursements, contracting procedures, and management of the state's psychiatric hospitals.
-- Take seriously the widespread concern among North Carolina homeowners that their property may be annexed into cities or taken by eminent domain without a sound justification. Enact real reforms of annexation law and curbs on eminent-domain abuse.
-- Take seriously the recent U.S. Supreme Court case that struck down campaign-finance provisions giving additional taxpayer money to candidates whose opponents spend their own funds for campaigns. North Carolina's taxpayer-funding system relies on a similar "millionaire's amendment" that would not now survive legal challenge. Take the opportunity to adopt true, Obama-style public financing by making it easier for candidates to raise and spend individual donations without having to rely on party caucuses, PACs, and independent-expenditure efforts.
Best wishes for a successful session.
John Hood is president of the John Locke Foundation and publisher of CarolinaJournal.com.
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