NC SPIN Online

Never waste a good crisis
A good friend reminded us of this adage this week. Just as Governor O. Max Gardner took advantage of the crisis created by The Great Depression to reorganize state government, our leaders need to use the current financial crisis to make reforms today.

The big buzz this week has been the growing realization of just how bad our economy truly is. Most everyone agrees North Carolina is going to have double digit unemployment reported in the next 30 to 60 days. Some 400,000 citizens are out of work and many more not reported have taken lower paying jobs.

There may have been partying on the opening day of the General Assembly yesterday, but today’s mood is sobering. The big question being asked by longtime observers in state government is whether or not our leaders have the will or the backbone to do what is necessary in our state. Will they waste this crisis by once again putting bandages on the gaping wound or will they do something real to reform state government?

We heard the rhetoric from both House Speaker Hackney and Senate President Pro Tem Marc Basnight. In Basnight’s speech he said the number one focus would be jobs, jobs, jobs. But how does he plan to create jobs, especially when the budget is in such a mess? And how will the state pay for stimulus programs? Can we do anything timely that will have an effect in calendar year 2009?

People in North Carolina got a first look at the so-called federal stimulus package that President Obama has been touting to create jobs. Whereas we first understood it was mostly infrastructure improvement, we now understand only about 5 percent will go toward building and maintaining infrastructure.

Cutting the budget
It is quite obvious that government managers failed in their task to identify those programs and services that could be cut from their budgets. One of three things occurred. Either department heads and leaders didn’t take Governor Perdue seriously, don’t know what things could be cut from their budgets in a crisis (and we are in one) or don’t have the backbone to do so. In the main, their recommendations to the Governor were met with incredulity and disdain. Perdue couldn’t believe just how poorly these responses were. The Governor was rightfully irritated and frustrated. Observers thought the suggestions laughable and an indication just how out of touch and uncooperative are our government bureaucrats.

Perdue is serious. She gets it. We understand the Governor is assembling two work groups to examine every agency of state government. The first, already reported, is to develop a 60 day report on priorities within the departments. The second will identify budget cuts. We are told cuts will be as much as 12-15 percent.

What is interesting is there is no real discussion (as of yet) about serious reductions in force of state personnel. The Governor instituted a hiring freeze (we will see how well that is being observed), expecting the annual 11 percent attrition rate in government employees would be enough to fix the budget. Salaries are the biggest item in state government budgets and if there are going to be real cuts, the payroll has to be reduced significantly. It won’t be fun but many are coming around to understand it will be necessary.