Difficult Choices on State Budget
With the right to run the state legislature comes the responsibility to be an active partner in the budgeting process, no matter how painful.
For both Democratic Gov. Beverly Perdue and the Republicans who won control of the N.C. General Assembly in the November election, next year’s session promises to be as painful as any in memory. And there is no reason for Perdue to shoulder all that burden by herself.
Those about to assume the legislative reins, true to the dogmatic stance that now characterizes the Republican Party at both the national and state levels, insist that they won’t hold still for any tax increases — not now, not ever. Period. End of discussion. And as far as those previous tax increases that are scheduled to expire — let ’em expire right on schedule.
Balance or Else
Or so goes the dogma. Sounds nice. But in North Carolina, there is also the little matter of the constitutional requirement to balance the state budget. Period. None of your deficits, such as those we have come to expect from the federal government. That’s a good thing.
But it means you either raise taxes, or you keep cutting expenses until income and outgo even out. And the way it stands right now, that means cutting even deeper into the bone than the reductions that have already been made, which were bad enough. And if that’s the way it’s going to be, then those who will be doing the suffering all across this state need to know just who’s responsible for it.
Perdue — speaking right here in Moore County — has already offered a set of creative ideas for streamlining state government and thereby presumably saving money. But most of those changes can’t take effect in time to make themselves felt immediately in the budgeting process. Therefore, the bulk of the savings will probably have to come out of programs as they are now structured.
The temporary tax increases enacted in 2009 included a surcharge of 2 or 3 percent on personal income taxes and a penny increase on the sales tax. Between them, they are expected to bring in $1.3 billion. But even that would go only part way toward closing a projected budget shortfall of $3.7 billion.
Leave Them In for Now
No one takes any pleasure in the prospect of extending the “temporary” tax hikes, now scheduled to phase out next June 30, for another year or so — especially given that the sales tax as it now stands (the combined state and local increments total 7.75 percent) exerts a disproportional effect on lower-income people.
But consider the alternative.
It is Perdue’s job to fashion a budget proposal and present it to the General Assembly. She has already made appropriate gestures in the direction of reducing, combining and privatizing programs to save money. In our opinion, she should leave tax levels where they are in her budgetary draft, suggesting enough other reductions to achieve balance.
If GOP legislative leaders reject that approach and insist on letting the surtaxes lapse no matter what, then it will be up to them to specify (and take the heat for) which further cuts must be made, even if they start going beyond bone and start threatening vital organs.
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