Senate President Pro Tem Phil Berger said a lot to hearten conservatives at his press conference today — yet it was also clear that challenges remain.
He said the state budget was in much better shape than two years ago. But he declined to predict a surplus. He said lawmakers were shooting for a budget with a lower bottom line.
Looming over this scenario, however, is Medicaid spending, especially possible increases mandated by the Obamacare health care overhaul. “We are having a great deal of difficulty understanding how, in a program that at its current level ended up with overruns in the hundreds of millions of dollars, we can reasonable afford to expand that program,” he said. At another point, he expressed doubts about whether federal officials are supplying NC with timely and accurate information about the program.
Moreover, he said that neighboring states are unlikely to expand their Medicaid programs, so if NC does, that might draw people here to swell the rolls further.
In short, as the Tar Heel State gets its own finances in order, Uncle Sam threatens to drop more expenses on to the state ledgers — to an amount no one can now assess, but surely will be in the hundreds of millions of dollars.
On tax reform, he said the legislature would pass a package, up to eliminating the income taxes. But he alluded to several proposals being discussed, so only time will tell which will be the front runner, and if it can get legislators to rally behind it.
His remarks also touched on the issue is about fairness: moving from income to consumption taxes is about the fair allocation of the costs of government, especially in regard to basing taxes on the economy of 2013, not 1933. Taxing services, as at least one reform plan would do, is more realistic and fair to the North Carolinians of today.
He was questioned about some details, and when asked for the rationale behind them, he replied simply that the rationale was: “No tax on income.”
Backers of this plan should be wary of being lured into the weeds of this debate. That’s what it’s really about: “No tax on income.” That should be conservatives’ mantra in the months ahead: “no tax on income.”
As he mentioned at one time, there’s an adage that politics is the art of the possible. It is entirely possible the General Assembly will take major steps to improve the state’s economy. Doing so will require the strength to persevere and get things done.