taxpayer protection act

As the North Carolina Senate prepares to vote on its proposed 2004-05 budget plan, it is important to keep in mind that an accounting change included in the plan has the effect of masking the magnitude of the proposed increase.

Gov. Mike Easley has proposed an annual cap on the growth of state spending in North Carolina that would be tied to personal income growth. In considering the idea, lawmakers should examine recent data that show state spending caps to be effective particularly if they rebate excess revenues to taxpayers and enjoy constitutional, rather than just statutory, authority. Without a spending cap, it is likely that fiscal discipline will disappear as the state’s economy recovers.