Gov. Mike Easley and other proponents are reportedly preparing to resurrect the idea of a state lottery for North Carolina. The case for this regressive and unpredictable source of revenue has, if anything, weakened in recent months, as other states with lotteries have experienced significant revenue shortfalls. The fact remains that Easley is overestimating the lottery’s potential revenue, thus creating the risk of additional tax increases in the future to make up the difference.
posted August 31, 2001 by Sherri Joyner, John Hood
North Carolinians deserve a complete and accurate picture of how their public schools are doing relative to rigorous national and international academic standards. The state's current accountability system, the ABCs of Public Education, is a good first step but needs improvement to increase the reliability and usefulness of information provided to parents and taxpayers.
North Carolina's public school leaders are touting rising scores on state tests to prove that things aren't as bad as critics complain. However, the current method of calculating school performance misleads the public. The emphasis on "growth" shifts attention from true student achievement to a manufactured "feel-good" measure.
A new plan from N.C. House Democrats to increase state and local taxes by another $633 million in FY 01-02 would further damage North Carolina's already weakening economy. If passed, the tax hikes would push North Carolina's tax burden higher than the national average for the first time in history, and 12 percent higher than the regional average. Our tax burden would far exceed those of such states as California, Illinois, Maryland, Massachusetts, and Pennsylvania.
A plan to increase North Carolina's sales tax by up to one penny, with a corresponding reduction in tax reimbursements to local governments, could endanger the state's economic recovery and threaten tens of thousands of jobs. No change in expected revenue growth or threat to the state's bond rating would have consequences severe enough to justify a $400 to $800 million tax hike on families and businesses whose tax burden is already the highest in the Southeast.
Homeownership is a vital component to a stable society and a thriving economy. It is a well-known presumption that owning a home gives an individual a stake in his or her society. For example, according to a recent study by scholars at the University of Chicago and Harvard University, homeowners are 10 percent more likely than renters to work to solve local problems. Another consideration is that homeownership is also the most common form of savings for the average working family. A home is typically the largest investment most families have.
By Jonathan C. Jordan and Michael Lowrey
Budget negotiations between the House and Senate typically lead to higher spending, as each side accepts all or part of an item the other wants. Another approach would be to accept only spending common to both budgets, a "reverse logrolling" that lets government expand only when a consensus exists to do so. For FY 2000-01, this approach would save nearly $200 million for future state employee benefit reforms and raise operating spending by only 3.8 percent.
The North Carolina House is debating its version of a 2001-03 state budget this week. Although imposing only a $6 million tax hike in contrast to the $233 million tax increase included in the Senate budget House leaders still managed to increase General Fund spending by 4.4 percent in the coming fiscal year, relying on increased collections of delinquent taxes, interagency transfers, and debt-service savings to balance the books. Now the budget battle really begins.
State employees can't be blamed for seeking better compensation. All workers do. But to fulfill their responsibility to taxpayers, lawmakers should rely on solid data when evaluating pay requests. The vacancy rate in state government is highly exaggerated, for example, while the number of vacant jobs actually being advertised is shrinking rather than growing. Furthermore, national data suggest that N.C. state workers are competitively paid on average and cannot demonstrate the higher productivity that might justify higher pay levels.
Putting the House's FY 2000-01 budget into proper perspective requires careful consideration of how spending should be measured and how it has changed over time. Furthermore, proposed changes in how the payroll and teacher bonuses are budgeted are more than just accounting gimmicks. They represent a net reduction in state savings. The bottom line for taxpayers: if current trends continue, state leaders will be setting the stage for tax increases in the near future.
