North Carolina is in a difficult financial jam, and those trying to reduce that problem to a quick sound byte would do their constituents better by finding a workable way out of the current jam.

It’s too simple to say “we don’t have a revenue problem, we have a spending problem.” That is the mantra many Republicans in Raleigh have been repeating this session. There is certainly some truth in that statement, but it ignores clearcut realities that no one could have anticipated.

Among those is the $830 million that was spent to repair damage caused by Hurricane Floyd. That storm killed 52 people and damaged or destroyed 55,000 homes in eastern North Carolina. The federal government provided aid, but it was not adequate. The misery caused by this storm was very real. The state had to step in. If that was part of what is being called the spending “problem,” then so be it. It was money well spent.

Another part of the larger picture is the downturn in the economy. The state loses tax revenue when stock prices nosedive, jobs are lost, corporate investment tapers off and salaries are frozen or reduced.

On top of this, skyrocketing medical costs are driving up the cost of the state’s Medicaid program and the cost of insurance for its own workers. Perhaps the rising cost of health care is among the least-discussed reasons that both the state and individual local governments are facing critical budgeting decisions. These increases are threatening to overwhelm private enterprise and local government.

And then there are the two lawsuits, both related to taxation, that cost the state $1.5 billion.

On the other side, there is no doubt that when times were fat in the 1990s, North Carolina increased spending on education and programs aimed at helping the needy. Perhaps there are savings to be found in those areas, but critics of these programs must be challenged to find specific areas that could be cut without affecting important programs. A more obvious area to look for cuts is in economic development and other Department of Commerce programs.

House Democrats have floated a plan that would raise income taxes for the wealthiest state citizens, give counties a 1/2 cent sales tax while eliminating the state reimbursements to local governments, and provide additional credits to families with children and married couples filing jointly. It’s a complicated but seemingly fair plan for addressing the current situation.

Regardless of what plan lawmakers eventually OK, it’s unfair to blame our current problems on unchecked spending. Closer to the truth would be to describe it as an “unlikely alignment of unfortunate circumstances.” It’s the hand we were dealt, though, and so now we must play it.

 

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The Smoky Mountain News