Governor Mike Easley kicked off the state budget debate Monday morning, proposing an increase in taxes on alcohol and cigarettes to help pay for a $21.5 billion spending plan that gives teachers a 7 percent raise and increases funding for mental health, education, and services for children in poor and working class families.
The tax proposals dominated most of the headlines about Easley's plan that would increase the size of the state budget by just over $800 million next year, or 4.2 percent. The attention is understandable. The tax hikes took many reporters and pundits by surprise and also prompted the usual right-wing rhetoric about government stealing your money to waste it.
There's no room in that analysis for a reminder that last year lawmakers cut the income tax on the wealthiest people in the state, which as Elaine Mejia with the North Carolina Budget and Tax Center points out, reduced state spending by roughly the same amount the new taxes would raise.
Like most budget proposals, Easley's plan has plenty to like and some things to complain about. He wants to give state employees a 1.5 percent pay increase plus a one-time $1,000 bonus.
That would cost $300 million, roughly the same amount as the seven percent raise for teachers, but it is hard to imagine state employees and their supporters in the General Assembly accepting the difference in raises without a raucous fight.
Easley wants to spend $68 million on the troubled mental health system, most of it on crisis care and improvements at state mental hospitals. He wants to reduce the number of hours that patients can receive community support services.
A News & Observer series found that $400 million may have been improperly spent on the program, primarily because of poor billing practices and lax oversight of who was providing services. Reducing the number of hours allowed may penalize people with mental illness who rely on the services every week.
Easley's plan spends $30 million on expanding health care for children, reducing the waiting list for a child care subsidy and increasing help for adoptive parents and foster care.
There are more investments in the state's probation and parole system, replacing money in some prison alternative programs, and more support personnel for the overcrowded courts.
Easley wants to give the university system another $107 million, including $11 million for campus safety measures, and community colleges $58 million more, not including more money for new buildings and to repair new ones.
Public education gets the biggest increase, almost $500 million, and the proposal would invest $45 million in expanding Easley's More at Four program for at-risk kids and Learn and Earn high schools. There is no new funding in the budget for Smart Start.
Easley wants to put $61 million in the state's savings account and another $65 in renovating state buildings and decided against proposing a major statewide bond for highway construction or other infrastructure needs, but told reporters he was willing to talk to lawmakers about it.
Overall, Easley's last budget as governor is a decent place to start this year's budget debate, regardless of what you think of the tax increases, because of its emphasis on education, health care, and kids.
The one exception is the conspicuous absence of any new funding for the North Carolina Housing Trust Fund that helps build affordable housing across the state. Easley wants to continue a home protection pilot program and spend money helping families in danger of losing their homes to foreclosure, but his budget ignores the plight of hundreds of thousands of families who are currently living in a housing crisis.
Fifty million dollars in the Housing Trust Fund would create 6,000 affordable housing units and as many as 3,000 jobs, but Easley's last budget, like most before it, ignores the Trust Fund and the families who need help with housing.
He does include money for a variety of notable projects, $15 million to renovate the Mattamuskeet Lodge in Hyde County, $2.7 million to fix the polar bear exhibit at the state zoo, and $375,000 to set up a state trade office in Shanghai.
Apparently people in North Carolina looking for a safe, affordable place to live need to find their way to the lodge or the polar bear's place at the zoo, or somehow make their way to China.