Stark budget choices

| June 30, 2014

Chris Fitzsimonby Chris Fitzsimon, NC Policy Watch and NC SPIN panelist, published in Greenville Daily Reflector, June 28, 2014.

Every year at the General Assembly members of the majority party in the House and Senate describe the budget put together by their chamber’s leaders as the best possible budget for North Carolina, one that will create jobs, improve education, and take care of folks who need help.

Some lawmakers go even further, calling the House or Senate budget the best one they have ever seen in their legislative careers.

Then just a few weeks later, after House and Senate negotiators come up with a final budget agreement, the same lawmakers will rise again and tell their colleagues that the new plan is actually the best possible budget for North Carolina, regardless of how dramatically it changes the budget they claimed was the best they had ever seen just two weeks before.

It’s an annual ritual at the General Assembly, the budget hyperbole replaced by conflicting hyperbole with no one blinking an eye. That may eventually happen this year, but it is going to take a while.

The House and Senate have seriously flawed and diametrically opposed ideas about how to give teachers a raise, how to “reform” Medicaid and how much funding public schools should receive.

There are dozens of other differences in the two budgets and working some of them out may be difficult, but it’s fundamentally conflicting approaches on teacher pay, education funding, and Medicaid that are holding up the budget agreement and there are few signs this week that the two sides are anywhere close to resolving those big issues.

Senate President Pro Phil Berger is standing firm behind the Senate proposal to give teachers an 11 percent raise, but only if their give up their career status protections. A column from Berger vigorously defending the Senate budget appeared in several newspapers in the last few days, not sounding much like someone who is ready to compromise.

Berger’s column doesn’t mention that the Senate plan would fire 7,400 teacher assistants and kick thousands of aged, blind, and disabled people off of Medicaid to pay for the salary increase.

House leaders and Governor Pat McCrory have both publicly criticized the Senate cuts and the idea of tying an end to career status to any raise. Rep. Chuck McGrady said that sounded like a bribe—and he is right.

But House leaders have yet to acknowledge that their proposal to base a five percent teacher pay raise on higher lottery revenues simply won’t work according to lottery officials and their own legislative staff.

It seems clear that House leaders knew before they voted on the budget that the additional revenue was unrealistic, but they still haven’t acknowledged it.

It would be wildly irresponsible for the General Assembly to leave town this summer without approving a new budget that gives teachers a raise and includes the additional funding needed for Medicaid—though some legislative leaders have suggested it.

It would also be wildly irresponsible for lawmakers to cut taxes again on corporations and the wealthy while either cutting off health care for vulnerable people or firing teacher assistants or raising more money with the predatory lottery.

But unless lawmakers come to their senses soon, some combination of those things will likely happen. Then we’ll have to hear members of the House and Senate tell us it is the best budget possible for North Carolina.

And nothing will be further from the truth.

Chris Fitzsimon is the founder and director of N.C. Policy Watch, a liberal public policy think tank and a project of the N.C. Justice Center.

Then there’s the cynical philosophy behind the proposal, encouraging low-income people to buy lottery tickets to raise money for a teacher raise because they can’t muster the political courage to find the extra money honestly, either with more draconian budget cuts like the ones the Senate proposes, or more appropriately by calling off the next round of tax cuts that take effect January 1st.

The scheduled reductions in the corporate and personal income taxes will cost roughly the same amount next year as the House budget incorrectly counts on from increased lottery sales.

Cancelling the next round of tax cuts would allow the House to fund teacher raises without preying on the poor with more lottery advertising.

Neither House nor Senate leaders have mentioned the next round of tax cuts of course. They would rather people not understand the choices they are both making—forcing low-income and vulnerable people to bear the cost of giving teachers a raise while corporations and the wealthy receive another tax break.

Governor Pat McCrory hasn’t said anything about the next round of tax cuts either, but he did say this week that he was preparing budget moves in case the House and Senate could not reach a compromise by the end of the fiscal year June 30th.

A memo from McCrory’s budget director Art Pope tells state agencies that if a budget deal is not in hand by next Monday their monthly funding will be based on the lower amount of their budget proposed by the House or the Senate with the exception of the 7,400 teacher assistants cut in the Senate plan.

It’s not clear why McCrory is weighing in publicly this way, other than trying to seem relevant during the House and Senate negotiations.

The General Assembly passed a two year budget last year, so state government won’t shut down if lawmakers miss the June 30 deadline. And the 7,400 teacher assistants won’t be cut anyway if no budget is approved.

Category: NC SPIN Perspectives - Opinions from NC Leaders & Organizations

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