Fitzsimon File

The budget negotiations between House and Senate leaders continue, though they have moved largely behind the scenes after this week’s subcommittee hearings to go over the differences between the two plans.

Some observers and right wing think tanks who prefer the Senate budget keep trying to frame the debate as one about taxes and fiscal responsibility, ignoring the need to make important investments in the state’s future. 

From their perspective, the Senate budget is more fiscally responsible because it cuts taxes and spends less than the House plan.  That’s why most Senate Republicans voted for the Senate budget and why House Majority Leader Paul Stam tried to convince some House Democrats to agree with it.

But the House budget cuts taxes too, primarily for the working poor with a state version of the Earned Income Tax Credit. As this column pointed out Thursday, the House also puts $315 million in the Rainy Day Fund, the state’s savings account, set aside for natural disasters or an unexpected financial crisis.

The Senate only puts $150 million in the savings account.  Then there are the certificates of participation, bonds that can be issued without a vote of the people at slightly higher interest rates than general obligation bonds.  

The Senate budget would borrow $1.2 billion, mostly for university projects, without public approval. The House calls for borrowing a third of that amount.

And finally the House invests in programs that not only help families, but that save money in the long run. More school nurses mean children get medical attention early and don’t show up at emergency rooms later. The same for the House plan to expand children’s health care coverage.  The House also invests in dropout prevention programs that the Senate ignores, programs that mean fewer teenagers in trouble and in prison.

The House budget already the support of folks who believe the state needs to make major investments to help people in the state who are struggling to meet their basic needs. But even people who think fiscal responsibility is a higher priority ought to look again at the two budgets.

The House cuts taxes too, borrows less money and makes financially prudent investments to save the state money.

 

Speaking of budget and tax policy, next week Americans for the Prosperous is bringing to town Dr. Barry Paulson, whom the group says is one of the nation’s “foremost experts” on fiscal discipline.

Paulson comes to Raleigh to tout the much discredited and misnamed Taxpayer Protection Act, a version of the Taxpayer Bill of Rights, or TABOR, a proposal that would amend the state constitution to impose strict spending limits on state government.

Versions of TABOR are in effect in states around the country, most notably Colorado, which has sharply fallen in national rankings of quality of life measures since voters approved the amendment in the early 1990s.

The restrictions of TABOR were so damaging that Republican Governor Bill Owens, a darling of the right wing and former TABOR hardliner, led a successful effort in 2006 in which voters decided to loosen some of the amendment’s requirements.  My colleague Rob Schofield explained the fundamental flaws in Tabor in a weekly briefing earlier this year.

And it’s not just policy advocates who recognize the problems with Tabor. Republican Norma Anderson, former member of the Colorado State Senate, appeared at the Emerging Issues Forum in Raleigh in 2006 and detailed the many problems with TABOR and urged North Carolina not to adopt it.

Wonder if anyone will mention Anderson’s experience and advice to North Carolina lawmakers when Paulson makes his slash and burn media tour next week?

 

The folks at the Pope Civitas Institute must also be giddy about Paulson’s trip to North Carolina, judging from their latest policy briefings that question key investments in both the House and Senate budgets.

One item that seems to really upset them is the proposal in the House budget that would provide health care coverage for uninsured children in families with incomes from 200 percent to 300 percent of the federal poverty level. Families would pay a premium on a sliding scale based on family income.

The House budget spends $12 million over two years to provide health care for thousands of children whose families cannot afford insurance, including children with chronic health conditions that make private insurance prohibitively expensive

Better in the Civitas/Paulson world view to return that money to taxpayers than to make sure children can see a doctor.  After all, $12 million is almost a dollar and a half for every person in the state.

We don’t need the Taxpayer Protection Act. We need protection from the Taxpayer Protection Act.

 

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This entry was posted on Friday, June 8th, 2007 at 3:57 pm and is filed under Fitzsimon File. You can follow any responses to this entry through the RSS 2.0 feed.