Three key things that state lawmakers should remember as they negotiate a final budget bill

It's never easy putting together something as complicated and important as a state budget. Contrary to the image conjured up by anti-government zealots of cigar smoking, fat cat politicians happily carving up pork in posh surroundings, a majority of it is actually time-consuming drudgery carried out by serious and sober men and women.

In North Carolina, lawmakers and legislative staff (and sometimes lobbyists, citizens and the news media) gather in simple, drab, (often crowded and windowless) rooms and go over and over long lists of numbers. And while there's always more than enough horse trading, special interest influence and downright dumb decisions to go around, most of the work boils down to making hard choices between worthy public services.   

This year in North Carolina has been no different. Indeed, if anything, it's been a lot less fun for everyone involved than ever before given the large volume of negative numbers on their spreadsheets and the painful debate over raising taxes.

Recently, of course, this year's process has ground to a halt as Senate and House negotiators have come to loggerheads over how to close at least part of the yawning budget gap that confronts the state. While both sides have agreed to raise just under a billion dollars in new taxes, the dilemma of how that will be accomplished has caused a great deal of division.

Senators argue persuasively of the need for longer-term reform and broadening of the tax base. House members in contrast, argue for overall equity and worry about political feasibility. Today – nearly three weeks into the 2010 fiscal year – Senators and Representatives are at an impasse, with each house claiming that its tax plan is the wisest and most politically sound.

Breaking the stalemate

Though based (at least in part) on sincere analysis on both sides, neither of the plans advanced thus far is perfect. As has been explained in this space and others, there are ways to combine the best of both plans into a workable compromise package that would emphasize reform and fairness.

Unfortunately, at this point – as so often happens in politics – negotiators from both sides are finding it hard to compromise. A combination of sincere beliefs, competing views of public opinion and likely voter responses, and a healthy dose of strong personalities and egos have brought things to a grinding halt – so much so that some players are at-risk of losing their perspective.

So, in the interest of shining a light on the forest and not just the trees, here are three key facts that should, if considered seriously, spur lawmakers onward with a renewed degree of urgency:

Fact #1 – Now is not the time for backsliding.  It's been suggested in some circles in recent days that given the difficulty of crafting a tax package, some lawmakers may be prepared to slash the size of the proposed revenue hike and impose hundreds of millions more dollars in service cuts. This would be a disastrous decision.

As it is, the state is already facing devastating cuts to human services, public schools, transportation, and a host of other essential public systems and structures. Governor Perdue has rightfully pointed out that the agreed upon tax figure of $900-plus million is already $600 to $700 million too small. Moreover, from a political standpoint, any political damage that may accrue is already done. Right-wing attacks will not stop if the tax package is reduced to $550 million. 

The bottom line: Lawmakers need not retreat from or feel sheepish about their decision to apply a tourniquet to the state revenue system. It was and remains the right thing to do.

Fact #2 – Children are more important than golf courses or Wal-Mart. This week, Raleigh's News & Observer ran a front page story in which it reported that some in the golf course business were concerned about the Senate's proposal to broaden the base of the state sales tax to include a number of entertainment and service transactions that currently escape taxation altogether – like golf. Apparently, the fear is that adding a sales tax to the price of playing a round of golf (the facilities already charge sales tax on all of the balls and clubs and other merchandise they sell) will somehow hold down business.

This is the height of absurdity. First of all, to think that golfers will choose not to play a round of golf – an activity that takes four to five hours and involves multiple expenditures (transportation, food, equipment, etc…) because the price of the "greens fee" just went from, say, $40 to $42.70 is preposterous. As many have noted, the average golfer probably uses $5-10 worth of golf balls each round.    

More to the point, the mere fact that such illusory concerns could even be seriously weighed against the health and well-being of any state's most precious resource – its children – is downright offensive. Lawmakers should not even allow themselves to be drawn into such ridiculous territory.

A similar conclusion must arise when it comes to the embarrassing whining heard in the legislative halls from lobbyists for numerous large, profitable corporations about the House's proposal to enact "combined" or "unified" tax reporting. In these times of profound economic crisis, everyone in North Carolina ought to be stepping up to the plate and sacrificing. All that the enactment of combined reporting would do is to require these companies to pay the fair share that they should have been paying all along. 

Fact #3 – Compromise is the order of the day.  While it's refreshing to hear lawmakers argue about serious policy issues like tax reform and progressivity, it will be damaging if the debate drags on too long. Under the current stopgap spending plans that have been keeping government running since the start of the fiscal year on July 1, many essential programs have endured (and are enduring) serious damage.

Consider, for instance, the well-respected Child Medical Evaluation Program at UNC. For three decades, this program and the medical professionals it employs have provided expert medical and mental health evaluations to kids who are abused and neglected. The program operates under a contract with the state Division of Social Services and handles roughly 5,000 cases per year.

Now, because it is not funded in the continuing resolution, the program finds itself having to lay off the doctors and clinicians it employs. Even if the program is ultimately funded in the final budget, as is expected, the current delay is causing huge problems and doing serious harm to the program and the vulnerable kids it serves.

Similar problems are, of course, on display throughout the state as local school systems grapple with budget uncertainty in the looming shadow of the commencement of the 2009-10 school year – a year that's already begun for some in year-round programs. This problem will only worsen the longer that the state continues to operate under the uncertainty of a temporary plan.

Going forward

It's a testament to some of the positive changes that have occurred in modern politics that this year's budget deadlock does not lend itself to a quick fix. Unlike days gone by in which powerful bosses could have simply decided and given an order, none of today's leaders are in a position to pull that off. Instead, they must persuade large and unruly groups of people to make hard choices that will undoubtedly be subjected to shrill attacks from anti-government naysayers.

On the other hand, no one expects miracles. In hard times like the present, incremental progress is good and legislators have already accomplished a lot. Hopefully, as they approach what should be the final few days of budget negotiations, lawmakers will remember to stay the course, keep the highest state priority (our children) first, and check their egos at the negotiating room door. If they do these three things, they'll be wrapping up the 2009 legislative session for good by the end of July.