State budget sense and nonsense

Editorial by Fayetteville Observer, June 1, 2017.

House Speaker Tim Moore insists there isn’t all that big a gap between his chamber’s budget plan and the Senate’s. He expects the House version of the budget to be voted on, and likely passed, this week. And then it’s on to committee where the lawmakers will negotiate a compromise.

Rep. John Szoka, the Fayetteville Republican who is one of the top House budget writers, echoes his boss and suggests that, “Some may try to drive a wedge between the Senate and the House. And while I agree that there are differences between the two finance packages ... I assure that the goal of both finance packages is exactly the same.”

We don’t need to drive a wedge. The difference between the two plans is evident to anyone who takes even a cursory look: The House budget is conservative but responsible. The Senate version is insane.

The Senate plan would slash both individual and corporate tax rates, It would give up about a billion dollars in revenue over the next two years and likely put the state in a budget crisis by early in the next decade — or require either deep cuts in state services or a substantial tax increase. The Senate proposes an across-the-board corporate tax cut even though our corporate tax rate is already the lowest in the country — and no other state’s rate is even close. It’s hard to imagine why Senate leaders crave such fiscal suicide, except perhaps to indulge a manic ideological urge.

The House plan, by contrast, shows signs of careful thinking, some of it apparently Szoka’s. The House doesn’t propose any further deep cuts in personal or corporate taxes, but rather a small increase in the standard deduction for income tax filers. It has some targeted tax cuts for businesses, designed to help existing businesses to expand and to lure new ones here. That includes ideas like sales tax exemptions on equipment bought by large “fulfillment centers” like the ones run by Amazon and Walmart. The cuts are designed to attract more such centers, employing 400 or more people. That makes sense. It’s sane budgeting.

The House version would only cut about a third as much revenue as the Senate’s. Even that doesn’t make a lot of sense, given our state’s needs. Gov. Roy Cooper’s budget plan would have left revenues at current levels and invested more heavily in our schools, whose funding sits in the lowest 20 percent in the country. We’re not going to attract a lot of new business to the state when our school systems are understaffed and underfunded, and our best teachers are exiting en masse to better-paying states.

But the governor’s budget was dead on arrival in the Republican-dominated General Assembly, so our best hope is for the House budget and its less dramatic carnage.

We appreciate Rep. Szoka’s assurances that the two budgets aren’t all that far apart, but we’re hearing the words of a man who will soon have to negotiate with the other side. We wish him, and his colleagues in House leadership, good fortune. They’re going to need it — and so do all the people who want to live, work and build businesses in this state. Further sweeping tax cuts won’t grow our economy much and in the long run they’ll hurt it. A restored, thriving system of public education will help the tides rise for everyone’s ships.

http://www.fayobserver.com/opinion/20170601/our-view-state-budget-sense-and-nonsense