Spending & Taxes

What follows is the minority report I submitted to the Wake County Citizens’ Facilities Advisory Committee on Thursday, September 13, 2007. Although I am a member of that committee, the chairs of the committee, John Mabe and Billie Redmond, denied my request to have this report included with the final committee report.

In the era of No Child Left Behind, students have not been discouraged from enrolling in courses other than language arts and mathematics. Both the number of class periods and the number of students enrolled in most courses has increased in concert with enrollment growth. Nevertheless, elementary foreign languages and middle school health and physical education courses have been on the decline.

Counties across the state are adopting Adequate Public Facilities Ordinances (APFOs) that require homebuilders to pay fees of up to $14,953 for each new home built.1 County commissioners favoring these ordinances argue that they allow public services to keep pace with population growth. Opponents believe that APFOs actually place an unfair burden on homebuilders and homebuyers because APFOs can significantly increase home prices.

Gov. Mike Easley and the General Assembly continue the spend-and-tax cycle, increasing the General Fund $1.8 billion, 9.5 percent, over last year. General Fund spending on operations reaches $20.7 billion in FY 2007-08, a 43 percent increase in just five years, similar to the five-year period through FY1997-98.

The legislature passed a law, SB 3, which would require North Carolinians to pay for electricity used by out-of-state residents. SB 3, which is the new, hastily drafted energy bill, was touted as requiring utilities to provide at least 7.5% of their electricity from renewable resources. However, North Carolinians likely will not be the recipient of a significant amount of this electricity.

North Carolina is headed toward imposing major new regulations and taxes on the consumption and production of energy, all in the name of fighting global warming. But the climate hysteria on which they are based has nothing to do with reality. Whatever the risks of future climate change, they pale in comparison to the risks of the “wrenching transformation” sought by climate alarmists.

The Senate fiscal year 2007-08 budget would have spent $1.3 billion (7.1 percent) more on operations than the previous year, plus another $1.2 billion in new debt. The Senate would have allowed the 8.0 percent personal income tax bracket and the extra quarter-cent sales tax to expire as current law requires.

There are three new proposals that would impose hundreds of millions of dollars in new taxes on North Carolinians in the name of fighting global warming. None of these proposals are actually called taxes.

House members approved a $20.3 billion budget for fiscal year (FY) 2007-08, up 7.6 percent from FY 2006-07; 1.5 times the 5.1 percent combined rate of inflation and population growth. Proposed spending is $1.4 billion ($158 per person or $632 for a family of four) higher than in FY 2006-07. Nearly all of the increase is in K-12 education, even though dropout rates have been increasing.

For many years, charter-school research has almost exclusively focused on the issue of academic performance. While this issue deserves attention, research indicates that parents choose charter schools based, not on one factor, but on a number of factors related to the schools' social and academic environments.