Put this on a ballot and it's a pretty safe bet to pass. Who's going to say no to a constitutional cap on income taxes?
But that's exactly what the General Assembly should do - reject a bill filed this week in the Senate that would cap the state's income-tax rate where it presently stands: 5.5 percent.
The measure might be good politics, but it could lead to terrible governance and some dangerous unintended consequences.
We've already got a constitutional limit on the state income tax. It can't rise any higher than a 10 percent levy. The state doesn't need that much revenue today, so lawmakers have trimmed taxes back to nearly half that.
And we wouldn't be surprised to see them do some further cutting, given the half-billion-dollar revenue surplus that appears likely by the end of this fiscal year - on top of a "rainy day fund" balance of around $1.5 billion. We'd be happy to endorse another tax cut, but not until after the state catches up on fixing and expanding its highways and other transportation infrastructure, and after it also moves our school funding back up to the national median. We've got some big needs in both those places.
But it would be nothing but shortsighted and dangerous folly to believe that the revenue spigot will look like an open fire hydrant forever. Revenue has ups and downs. So does the economy. We trust our lawmakers remember what recession did to state revenue only a decade or so ago. There have been times in our state's history when it's been necessary to bump income taxes up, at least temporarily, to maintain essential services during economic downturns.
What happens if this new tax cap is installed in the N.C. Constitution and then we get hit with another Great Recession? If the revenue streams run nearly dry, what do we do? Lay off teachers and increase average class size to, say, 50? Do we let inmates out of prison because we can't pay the guards? Triple tuition at state universities? Close state parks?
Over the years, we've seen lawmakers of both parties exercise responsible stewardship of the public's money. This is a fiscally conservative state, no matter which party has been in charge, and we don't see that changing.
Handcuffing lawmakers to a 5.5 percent tax rate may play well with shortsighted voters - and some shortsighted legislators as well. But it could come back to hurt us badly in the next downturn.
Reject the tax cap and insist that the General Assembly continue to take responsibility for fiscal prudence. That, after all, is what we elect them to do.
