“State headed toward $1 billion shortfall,” screamed the October 2 headline from the Triangle Business Journal. “Another shortfall?” asked an October 5 Charlotte Observer editorial. What was predicted as far back as May 15, almost two months prior to Governor Mike Easley signing the 2006 budget into law (June Civitas report), is now becoming a reality.
As we wrap up the legislation passed during the General Assembly's 2006 Short Session, it is interesting to reflect on the new laws that were passed and see the direction the Democrat-led legislature and governor are taking North Carolina.
1. Temporary increases in the sales tax and income tax rates were imposed in 2001 with the promise that they would be repealed, or sunset in 2003. Economic conditions and choices made by the leadership did not allow the taxes to be repealed, as promised in 2003, and they were extended until 2005. In 2005, the promises of repeal were again broken and the taxes were again extended until 2007. Currently, there is a $2 billion surplus in revenue. When, if not now, is the time to repeal these temporary taxes? When, if not now, will promises be honored? When, if not now, will the taxpayer get a break? 2. Due to unusual and unique economic conditions, North Carolina finds itself with a $2 billion surplus in revenue this year. Instead of making good on the promises to repeal “temporary” taxes, the House proposes increasing spending by 9.74 percent over last year's spending. Admittedly, some of the spending is for good causes — teacher and state employee raises and help for the counties with Medicaid burden. However, not all of the spending is justified or necessary. Once again, it comes down to a matter of priorities. What is more important new and expanded programs or returning money to taxpayers? A vote on this budget will clearly identify those members who value a promise kept, who understand and respect the sacrifice of each taxpayer, and are courageous enough to budget for the future.
In Civitas' ongoing mission to be a “Legislative Strike Force,” the Civitas staff is often called upon to provide comprehensive, yet understandable, answers to many questions regarding legislative issues. The following is a list of the top 10 questions asked during the week of May 15.
Yesterday Governor Easley delivered his Recommended Adjustments for 2006-2007 to the legislators. Although it will take weeks to digest the entire 210-page document, which outlines how the Governor proposes spending $19 billion, the following outlines some of Civitas' initial concerns.
They said it couldn't happen here. They said we were safe. They said the law was clear. They were wrong. Turns out that under current North Carolina law, the government can take your private property for economic development just like they did in Connecticut under the Kelo case.
As we continue to review the final budget, we, like so many others across the state, are shocked at the special provisions (pork spending) that are included. We found over $150 Million Dollars. This is more than the budgets for many Departments in state government including, Agriculture, Commerce, Labor, Crime Control and Public Safety, Justice, Cultural Resources, Insurance, Revenue, Secretary of State and the State Treasurer!