The idea that a North Carolina Senate led by Phil Berger would agree to a budget acceptable to Governor Cooper was always hard to believe. But if recent reporting proves to be correct, Berger’s intransigence may block even an agreement with the state House, usually little more than the Senate’s junior partner. Senators have released a series of proposals and demands that likely foreclose any possibility of a good budget this year, in spite of the fact that the state faces perhaps the best fiscal outlook in its history.
To be clear: the sunny position in which North Carolina finds itself fiscally did not result from Republicans’ self-proclaimed budgetary genius. Instead we stand where we are because, ironically, of GOP incompetence and progressive policies at the federal level. Because Republicans played hardball with Governor Cooper in the last biennial cycle, the state has a bottleneck of funds to spend for itself. And the American Rescue Plan has deposited millions more into the state’s coffers, no thanks to the Republican Party.
So. Against Republicans’ will, we have the opportunity to pass generational investments in the people of North Carolina. Until just a few weeks ago, observers reckoned that this could happen. But as is their wont, Berger’s caucus came charging out of the gate with the most conservative plans possible. In addition to a $2.1 billion tax cut, right-wing Senate mandarin Brent Jackson has proposed adding another $1.7 billion to the state’s bloated rainy day fund. What Senators plan to do with that enormous reserve of rainy-day money is unclear given that they wouldn’t release even a penny of it during last year’s pandemic crisis.
The Senate’s tax plan is completely unacceptable to Governor Cooper and House leaders seem uneasy about it. This is fully justified: it’s a radical plan. In just six years, it would eliminate the corporate tax entirely, on the theory, debunked decades ago, that catering to “job creators” is a surefire way to supercharge the economy. We have lost numerous transformational projects to states with higher corporate tax rates than ours, most recently Toyota-Mazda to Alabama, which is tied for the highest corporate tax in the southeast. Further, Senators want another $1 billion+ income tax cut that would redound overwhelmingly to the wealthiest North Carolinians.
This is not a reasonable proposal.
On the whole, the Senate’s tax and rainy-day fund proposals alone would wipe out half of the state’s surplus. Not that this is surprising; Berger’s band of ideologues has proven over ten long years that they want to fulfill Grover Norquist’s dream of making government small enough to drown in a bathtub. It’s almost like they can’t imagine anything to do with government revenue except to distribute it to the bank accounts of wealthy people and the corporations they run. But this year’s foray into ideological dreamland is even more inexcusable than has been typical for a decade. We have revenue; we have pressing needs for public services; we have an opportunity to invest, and Phil Berger is squandering it utterly.
Alexander Jones is an original contributor to PoliticsNC.