Raleigh, we have a problem. We may run out of fuel and crash-land.
The fuel is money, and by 2020, North Carolina may be short. Like about $1 billion short, which by anyone's definition is real money.
This estimate comes from the General Assembly's own nonpartisan Fiscal Research Division, a staff that includes economists who have pretty good insights into the way fiscal policies translate into dollars and cents.
The division's latest report was delivered a week after lawmakers adjourned their budget-writing session and went home, at least until August. The analysis was requested by Senate Democrats, who feared that another round of deep tax cuts could harm the state's ability to balance its budget. Some economists in the division had forecast that shortfall in the weeks prior to the budget's passage.
Nevertheless, the Republican majority persisted. They cut tax rates for middle-income earners as well as for the rich. And they cut the state's corporate income tax, even though it was already the lowest in the country.
And now, in response to the Research Division's predictions, Republican leaders say we needn't worry. They're sure that whatever is left after the tax cuts will be plenty. "We are not projecting that kind of growth in government spending because we are not going to automatically spend every dime we get our hands on," said Rep. Bill Brawley, a Mecklenburg Republican who is senior co-chair of the House Finance Committee.
We're worried about the translation of that statement. It means you'd better like the government you've got now, because it's not going to get any better than this. Our schools, for example, may have seen all the fund restoration they're going to get. Teachers have gotten some raises over the past couple of years, but they're still a long way from where they stood before the recession — at the national median for all teacher salaries. They're not even close to that now, still standing in the bottom third. Thousands of teacher assistants have been laid off in the past decade, and it doesn't appear they're coming back. Teachers are still reaching into their own pockets to buy supplies for their students, and that's not going to change. And all those decrepit school buildings and aging school buses? Get used to it.
Instead, we're looking into the hungry mouth of a deficit, despite the magical thinking of budget writers like Brawley, who's just sure the Tooth Fairy will continue to deliver budget surpluses in response to tax cuts — a phenomenon that has never worked out for any politician anywhere.
We're all for fiscal prudence, but we like it when it's grounded in reality. Senate Minority Leader Dan Blue, a Wake Democrat, sums it up more accurately: "The numbers are clear — tax cuts have taken priority over our state's core responsibilities. This is not healthy and it is not a responsible way to operate."
Just last week, State Treasurer Dale Folwell announced that all three major national bond-rating agencies had reaffirmed North Carolina's AAA rating. We're one of only 12 states with such a solid-gold rating. We're wondering if that rating will survive a billion-dollar revenue shortfall. More important, we're also hoping our kids will survive our lawmakers' cut-at-all-costs philosophy and somehow become educated, productively employed adults. With its latest budget decisions, the General Assembly is putting a big bet on a risky idea.
—The Fayetteville Observer