The N.C. legislature has enacted many unwise policies in the past few years.
The Senate has just come up with the worst yet.
Why the worst? Because this one, if approved, would tie the hands of future legislatures.
Fortunately, the “Taxpayer Bill of Rights” requires amendments to the state constitution. They must be endorsed by a vote of the people. And we’re certain the people are wiser than their legislators.
The measure would nail in place conservative financial objectives: Restricting annual budget growth to the rate of inflation plus population increase; establishing an emergency reserve fund; and setting a personal and corporate income-tax ceiling of 5 percent.
Future legislatures could break the spending limit and tap into reserve funds only with two-thirds votes in both chambers.
While precautions against irresponsible spending can be justified, these steps actually violate a greater principle. They deny future lawmakers a fair opportunity to do their jobs.
Every legislature should have the chance to decide the tax-and-spending priorities for its own era. Today, North Carolina is slowly emerging from a long economic slump. Spending for education, transportation, human services and other needs is at a low level. The state is at risk of falling behind other states and nations. It will keep up and get ahead when it can afford to make aggressive, strategic investments. Gov. Pat McCrory has proposed some. Binding tomorrow’s leaders with fiscal handcuffs makes no sense.
Locking in tax policy is just as foolish. If maximum income-tax rates of 5 percent are set, other taxes will go up. Either state spending cuts will force local governments to raise property taxes to pay for basic services, or sales taxes will be increased. We’ve seen this trend already. When progressive taxation such as graduated income taxes are replaced by regressive consumption taxes, more of the burden slides from the wealthy to the middle class and poor. Future leaders need flexibility to raise revenue in balanced ways.
These proposals are not only far-reaching, they’re hasty and ill-considered. They were pushed through the Senate with little study and without a public hearing. Arguably, this is the most important legislation introduced in years in North Carolina. Yet, it only emerged from committee in the past week, long after the General Assembly should have adjourned and at a time when most legislators are focusing on passing an overdue budget. The governor has been silent.
State Treasurer Janet Cowell has not. She opposes this measure, warning it could jeopardize the state’s bond ratings because it restricts the ability of future governors and legislatures to manage financial crises.
Senate Republicans brushed these concerns aside and passed the measure on a party-line vote Wednesday. The House should not follow.
Otherwise, it will be up to the voters to halt this rush to lock down future growth. The people should have enough confidence in the political process to believe they will elect representatives capable of making fiscal decisions that fit the needs of the state year by year. They do not need to exercise judgment today over tomorrow’s decision-makers. With luck, the voters and the leaders they elect years from now will prove to be wiser than today’s legislators.
