Governor Cooper's extremely moderate budget proposal

by Rob Schofield, NC Policy Watch and NC SPIN panelist, March 12, 2019.

Gov. Roy Cooper is an enormously skilled politician with a top-flight staff and many years of experience in the state policy wars, so it probably makes some sense to give him the benefit of the doubt when it comes to the budget negotiations he will conduct with Republican legislative leaders over the next few months. One imagines that Cooper understands well what will push the right and wrong buttons – both for GOP leaders and the public at-large – and, ultimately lead to the best outcome when the final deal gets done sometime this summer.

It should also be pointed out that the budget the Governor rolled out last week includes a boatload of great ideas – both large and small.

On the macro level, the Governor has advanced several critically important proposals that would dramatically improve the lives of millions of people.

His proposal to close the Medicaid gap promises to save thousands of lives, draw down billions of federal dollars into the state’s economy and create thousands of jobs.

The increased investments he proposes for our public schools – both with respect to educator pay and physical infrastructure – are absolutely essential and the kinds of things he was elected to champion.

His proposals to revitalize rural communities with new investments in things like broadband connectivity, water and sewer, and affordable housing are both long overdue and the kinds of proposals that ought to win support from Republicans, who hold more political sway in the state’s rural areas.

Cooper’s budget also includes several fabulous ideas on what might be termed the “micro” level as well, including, among other things:

• doing away with the ridiculous requirement that teachers pay for their own substitutes when they take a personal leave day;
• altering the law so that 115,000 poor children no longer have to pay part of the cost of their school breakfasts and lunches,
• allotting millions to tackle the environmental problems posed by GenX and other emerging contaminants, and
• providing more administrative support for lower-income areas so that they can better access early child education dollars.

Yet another point in the Governor’s favor is the fact that politicians and pundits on the right have already blasted his proposal. As UNC law professor Gene Nichol so eloquently explained in a recent essay in Raleigh’s News & Observer, Senate President Pro Tem Phil Berger all but called Cooper a communist for his modest and understated State of the State speech last month, so it’s not surprising the Governor was rewarded with similar treatment last week. If Cooper had proposed selling off half of the UNC campuses to the Koch Brothers, many Republicans would probably have carped about the asking price.

All that said, one can’t help but wish that Cooper had offered some kind of more determined push-back against the structural budget deficit that Republicans have imposed on the state in recent years. Cooper’s budget chief Charlie Perusse didn’t shy away from highlighting the Republicans’ destructive handiwork when he followed Cooper to the podium at last Wednesday’s press briefing. Among other things, he offered up a powerful graph (click here and see page 10) which showed that GOP tax cuts – primarily for the well-off and profitable corporations – are costing the state $4 billion per year that it could be using to fund core structures and services.

In other words, while the Governor was able to produce what is, in many respects, a fine budget for the upcoming biennium, he did so without addressing several underlying problems that cannot be deferred much longer. As Alexandra Sirota of the N.C. Budget and Tax Center observed last week, four major concerns stand out:

1. The proposed budget for the next two years holds spending at historically and arbitrarily low levels as a share of the economy.
2. As opposed to the approach the Governor embraced last year with a proposal to stop scheduled income tax rate reductions, the new proposal relies on unappropriated balances, reversions, and modest revenue collections above projections to fund current service levels and expand services in a narrow set of areas.
3. The proposal doesn’t address the upside-down nature of the state tax code.
4. The proposal does not address future projected structural deficits — i.e. the gap between expected revenue and what it will cost to maintain current services over time.

The political strategy behind the approach Cooper has chosen is fairly obvious: With current year revenues at minimally adequate levels and the prospects for generating anything other than blood curdling screams of opposition from Republican legislative majorities to any kind of tax increase proposals – even those that merely target the very rich – the Governor has opted not to pick a fight he thinks he can’t win.

It’s probably smart politics.

At some point soon, however, North Carolina must get to work repairing the dreadful fiscal damage inflicted by conservatives over the last decade. Caring and thinking people should keep this fact front and center in their minds as they advocate and organize in anticipation of the next major gubernatorial budget proposal in 2021.

http://www.ncpolicywatch.com/2019/03/12/gov-coopers-extremely-moderate-budget-proposal/