Time For Leadership On North Carolina Budget

By North Carolina State Senator Fred Smith

During the 2006 election, many candidates for office faced questions from voters about the increasing size of North Carolina state government. Questions about the fiscal responsibility of the Easley Administration and Democratic legislative leaders are timely. The past ten years, General Fund spending has grown 24% faster than combined inflation and population growth – translating into a $1,116 increase in real dollars for a typical North Carolina family.(1)

State government spending continues to be out of control with a projected $500 Million revenue shortfall in 2007. The most recent state budget increased spending 9.7%, on top of an 8% increase last year. The failure of the Democratic legislature and Governor Easley to prioritize and control spending has resulted in millions of dollars of inefficient expenditures – instead of worthwhile investments like educating our children or building and maintaining roads.

Ultimately, this careless, undisciplined spending has also forced North Carolina to impose on its citizens the highest tax burden in the southeast. Meanwhile, the local tax burden is also increasing.(2) Irresponsible year-after-year increases in spending strain family budgets, stifle private sector growth and damage the ability of small businesses and entrepreneurs to create new jobs.

Even Lt. Gov. Perdue, one of the most liberal Democratic officeholders in our state's history, seems to recognize the problem. She recently penned an email to supporters touting her hot new "reform" idea: a permanent state efficiency commission. The commission, she says, would "present a maximum of ten separate governmental efficiency proposals" to "counter the pressures in the system favoring wasteful spending and loopholes."(3)

Taken as a stand-alone plan, her proposal is not a bad idea. However, Perdue's latest press release misses the larger point. The failure to control spending isn't for lack of boards, commissions, or processes – it's for lack of leadership. The governor already has the power to appoint advisors or seek outside counsel on fiscal issues – or any other state problem. The governor has the veto power on the budget. He controls the Office of State Budget and Management. He has the bully pulpit.

On the campaign trail in 2004, Gov. Easley's "solution" to the spending problem was a self-enforced spending cap. During the 2005-2006 General Assembly, Easley promptly broke that pledge by signing two budgets that blew through his own cap. Now, Perdue has the magic bullet: her permanent efficiency commission. She says the group will create the "institutional momentum" needed to fight spending. Why add a new commission to the over four hundred boards and commissions already in existence, rather than just rolling up our sleeves and tackling the spending problem? Real leaders take excuses off the table, use the tools they have and get the job done.

Some skeptics may look at Perdue's record and fear that her efficiency commission proposal is just political lip service. She can prove the skeptics wrong though by signing on to support the constitutional amendment I have introduced to cap state spending growth.

Our rapidly growing, rapidly changing state doesn't have time for bureaucratic piddling with new processes. Instead of tinkering with the system, we must make real change which requires leadership. My Taxpayer Protection Amendment limits government spending growth to inflation and population growth. This legislation would immediately put real limits on government growth, finally forcing the legislature to prioritize spending.

Talking about fiscal restraint, finding government efficiencies, and getting tough on spending is a lot like talking about going on a diet. There are a lot of gimmicks and new fads, but we all know there's only one real solution: discipline. We don't need a new "fad" plan, we just need a leader with the discipline to make sure government eats less and exercises more. A constitutional spending cap would force government to create a strategic plan for growth, prioritizing what we consume and cutting outmoded, irrelevant spending.

We don't need a new blue ribbon commission. We don't need to pass the buck. We need results – and that takes disciplined leaders who will roll up their sleeves and make tough decisions. At the end of the day, improving government efficiency and reducing unnecessary spending reduces the demand that government places on the private sector, so the private sector can create jobs and economic growth.




(1) "The State Budget." John Locke Foundation: http://www.johnlocke.org/agenda2006/statebudget.html

(2) Lowrey, Michael. "By the Numbers: What Government Costs in North Carolina Cities and Counties." The Center for Local Innovation. http://www.johnlocke.org/acrobat/policyReports/btn2006.pdf

(3) Perdue News Update, December 29, 2006.