North Carolina is nearing three weeks into the new fiscal year without a new state budget. An inconvenience for some, but in no ways devastating or a crisis. Spending levels revert back to the previous fiscal year going forward until an agreement is reached. Of course, blame will be thrown around as to which side is at fault and there will be plenty of jockeying to try and control the political narrative with this budget impasse. And while I get the frustration on the right with Gov. Roy Cooper holding the budget hostage over Medicaid expansion, there is little doubt he will continue to try and flex his political muscle. That only stops when there are political hits to his popularity or punishment at the ballot box. While some form of compromise or deal is inevitable (including a veto override), I believe there are three basic guiding principles for conservatives when it comes to state budgets. Those principles should be a priority in navigating the current impasse.
1) Cut out the cronyism:
Obviously, this is a no brainer if you believe in basic ideas of fairness and equity for taxpayers, consumers, business, and entrepreneurs. Yet, here in North Carolina, it’s a legitimate problem. In politics, there is a lot of horse-trading that goes into swapping or buying votes, but let’s not add more pork to the problem. Taxpayer dollars should not be spent for political favors or dubious special projects to merely harvest votes for a budget, a basic obligation of responsible governing. Civitas President Donald Bryson hit directly upon this point in his article “A conservative solution to the state budget impasse.”
“Conservatives at the General Assembly should stop looking to ‘buy’ their way out of a political impasse. It can’t be done, and if it can be done, it won’t be a political win for conservatives,” writes Bryson.
2) Beware of further tying the state to a bankrupt federal government:
In the future, this will be one of the most important issues for states being on solid financial footing. It’s no secret that the federal government is broke and headed towards an even greater crisis. Check out the debt clock and all of our long-term entitlement obligations. It’s not sustainable, and at the very least, taxpayers and state budgets are going to have to bear more of the financial burden going forward.
Currently, in North Carolina, this primarily applies to the debate over Medicaid expansion. Cooper is digging in and intent on making expansion the signature issue of his tenure, at least for a first term. Conservatives must be insistent at trying reasonable efforts for deregulation and market-reforms to provide more affordable health insurance in the state. Citizens should question the commitment of politicians who spout free-market principles but are quick to abandon them for political gain. Only after exhausting all of these measures for reform and seeing no improvement, should a conversation be initiated about expanding entitlements and the state’s dependence on federal dollars.
3) Control spending and provide tax relief:
By and large, Republicans have done a good job controlling state spending since taking over leadership of the General Assembly. A 3 percent growth over a year is rational and responsible given the demographics and population growth of the state. (This number excludes the State and Capital Infrastructure Fund (SCIF) as Civitas budget experts Leah Byers and Brian Balfour explain in “NC budget compromise: What you need to know.”
Of course, there are always places to trim additional spending and to return taxpayer dollars to the citizenry in a budget as large as this one.
The biggest reason to control spending is not only related to championing a sometimes nebulous term like “fiscal responsibility,” but the importance of securing the property (which certainly includes income) of the citizenry. After all, this is a primary purpose of why we implemented our system of government.
I’m continually amazed that more people don’t revolt over taxes given all the taxes we do pay. Undoubtedly, payroll deductions were a brilliant design for tampering down any tax revolt. But we pay income, property, sales, inheritance, capital gains, and gas, to name a few. Plus, one has to consider all the fees along with the taxes (and taxes passed along, like corporate taxes or taxes on healthcare providers). It’s a little dizzying to try and figure out all the ways you are taxed on a single source of income or revenue stream.
The GOP has controlled the legislature for eight years now. They face an important test on the budget and their commitment to markets or falling into the trap in believing that more government is the solution to our problems.
