2008 Budget Rule Violations

General Assembly Again Proves Need for Public Accountability

In 2007, the Civitas Institute reported that the General Assembly repeatedly broke its own legislative rules, adding new pork projects that had not been debated on the floor, making major changes to budget provisions, inserting new laws into the budget bill, and providing more money for items than was proposed in either chamber’s budget. The final 2007 budget contained more than 100 such violations.

This year, the 2008 budget shows improvement, but Civitas has still identified more than 50 violations of the General Assembly’s self-imposed rules (cf. House Rule 44(b)) governing the conference process. Included among these are some commendable efforts to reduce spending in the face of declining revenue projections – the conference committee eliminated or reduced some expenditures that were in both chambers’ budgets. However, the final bill still includes some major legislation and spending that had not previously seen the light of day. Among the most significant:

• A new provision appearing in the final budget document – not in the Senate or House versions – allows the State Treasurer to issue General Obligation (GO) bonds via a seldom-used option that allows a GO bond that has been retired to be reissued at two-thirds the original amount without voter approval. (The State Constitution requires voter approval of debt. In recent years, this requirement has been circumvented by the issuance of Certificates of Participation (COPs), which are guaranteed by liens on the new properties, not by the State. GO bonds are guaranteed by the full faith and credit of the State, and therefore require voter approval.)

• The conference committee inserted $24.5 million in special indebtedness (COPs) authorization for a new nursing building at N.C. Central University into the final budget.

• A new Energy Efficiency Reserve is created, with $5 million in Repairs & Renovation funds earmarked for its use. In addition, the final budget directs a new study of the impact of plastics on the environment and plastics recycling in North Carolina.

• A new Task Force on Preventing Childhood Obesity is created and funded at $100,000. (The Task Force appears to have been slipped into the continuing resolution passed on June 30, 2008 (S.L. 2008-34).) The task force has been assigned sweeping goals that include “improving the availability of healthy foods at home and in the community” and “encouraging communities to establish a master plan for pedestrian and bicycle pathways.”

• $24.6 million is spent over and above the highest amount that either the House or the Senate chose to spend on specific items, including an extra $19 million for ABC bonuses, and $6.5 million is spent on items not included for expansion in the House and Senate budgets.

Perhaps the worst aspect of these violations is that finding them requires combing through more than a thousand pages of budget documents. Instead of leaving citizens and legislators to hunt for these items, the Legislature should hold itself publicly accountable by disclosing on the General Assembly Web site every item and provision that violates procedural rules. Greater transparency regarding state expenditures will empower taxpayers, activists, and the media by providing them with easily accessible details on state expenditures. Greater transparency will also enhance public debate regarding the size of North Carolina’s government.

Full list of rules violations are in PDF below, along with a complete list of COPs-funded projects in the House, Senate, and Conference (Final) Budgets: