Fitzsimon File

The November election hangs over every short session of the General Assembly, as legislative leaders in both parties hear from political consultants about what will play well with potential voters.

But this fall's election is different than most. There's heightened interest in the presidential race in the state, and more importantly, the offices of governor and lieutenant governor are open, as both two-term incumbents are moving on.

That means things will look different in Raleigh in January no matter who wins in November, new cabinet secretaries, new members of policymaking boards and commissions and new priorities.

That is clearly part of the deliberations in the General Assembly this session on issues like transportation. It makes more sense to wait until the new administration in place before making major decisions. (Too bad that didn't stop the toll roads that now appear to be a done deal)

It is also part of the budget negotiations between Governor Mike Easley and the legislative leadership as the state revenue picture continues to grow dimmer. Lawmakers have been trying to find places to cut the budget by $70 million as part of reaching a final agreement.

The episode is a reminder of one of the biggest failures of Easley's eight years in office, and it has nothing to do with the travel expenses or salary increases of Easley's wife Mary.

Easley took office in the middle of a fiscal storm and correctly pointed out that the state's tax code was out of date and needed an overhaul to make sure that state revenues grew with the economy.

There was general consensus then, and it remains now, that the state's narrow sales tax base should be broader and apply to services as well as goods, and the overall rate could be lowered, raising the same amount of revenue initially but providing more steady growth in future years.

Easley appointed one tax reform commission not long after he took office. That commission made some recommendations about closing tax loopholes, but there were few sweeping proposals and nothing fundamentally changed.

Two years ago, Easley tried again, working with legislative leaders to set up the Fiscal Modernization Commission that would finally tackle tax reform. The Commission did work out a proposal to end the county share of Medicaid, but the larger issues were brushed aside again.

Meanwhile, Senator David Hoyle and a handful of other lawmakers led efforts to make the tax code worse, adding sales tax exemptions for various industries and this year repealed the gift tax paid by the wealthy.

Hoyle and Easley and virtually every other state leader say they believe in a fair and adequate revenue system for the state. The budget blues this session are the latest evidence that it is not adequate.

The N.C. Budget Tax Center reported earlier this year that the wealthiest one percent of state taxpayers pay less taxes as a percentage of their incomes than the poorest twenty percent of the population.  The system is clearly not fair.

Neither Charlotte Mayor Pat McCrory nor Lieutenant Governor Beverly Perdue has said much about tax reform in their campaigns to succeed Easley as Governor. McCrory does occasionally parrot the misleading talking points of the Right and claim that North Carolina is a high tax state.

North Carolina is not a high tax state. It is an antiquated-inadequate-unfair-tax state. And it is led by politicians who remain unwilling to take on the special interests to reform the revenue system to make sure there will be resources available to pay for the costs of the state's growth and to help families still struggling to make ends meet.  And so far this election season, there is little reason to hope that the next administration will be much different.

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This entry was posted on Wednesday, July 2nd, 2008 at 2:48 pm and is filed under Fitzsimon File. You can follow any responses to this entry through the RSS 2.0 feed.