The Budget Fiasco of 2001

The Budget Fiasco of 2001

Why the Process Stalled

If the Democrats have a majority in both the House and the Senate, then it should be obvious that Republicans are not blocking the budget. After all, they can't, there are not enough of us. So what is the problem?

I'd say it is the fact that the majority of the members of the House have completely lost confidence in the budget process. We didn't even receive a line item budget as a starting point. The Democrats in Governor Easley's administration determined that the budget documents left behind by the Democrats in the Hunt administration were so flawed as to be worthless, so they trashed them. While this was probably justified, it left the legislature without spending details to use as a starting point.

Making matters worse, Governor Easley's budget projections were also fantasy based, incorporating non-existent revenue in order to avoid serious scrutiny of expenditures.

The committee process was equally flawed. Requests for budget documents that would permit detailed comparisons of current spending levels to proposed levels were ignored. Requests to go to zero-based budgeting were ignored. Committee chairs highlighted a few programs for scrutiny, but overall spending was pretty much ignored.

The level of incompetence and insider dealing was made clear when the House budget was printed including Capital Appropriations of $132,936,000. Since this committee had never met, it made it pretty clear that the overall committee process was a sham. When this oversight was pointed out, the full Appropriations Committee meeting was delayed so the Capital subcommittee could pretend to meet and rubber-stamp the insiders' plans.

Both the Senate and the House budgets were such insider deals that most members have no feeling of ownership. Excluded from the budget process, many members have had a great deal of time for independent research and as a result they realize how amazingly bad this budget really is.

Giving Away Money
Who Says NC Is Broke?

According to most of the major media, NC must raise taxes or cut essential services. Apparently our legislative leaders aren't reading the papers, because they still want to give away money as freely as ever. And it seems the press is quite willing to keep quiet about the giveaways, perhaps because it would be embarrassing to admit how wrong they have been about the need for higher taxes.

Senate Bill 247 made it all the way through the Senate and to the House Floor without even visiting the committees that supposedly control spending, even though it would put taxpayers on the hook to spend an additional $129 million for which they are not now obligated. It came within a hair of passage and is still a live bill, yet the press sees no need to warn the public that it is even being considered.

What does the bill do? It takes funds that were set aside to make loans to local governments for sewer system improvements and converts them to gifts to the fortunate few who receive them. As loans, the state is merely exchanging cash for an account receivable with no impact on the state budget. By making gifts instead of loans, there is obviously an expense that will hit the state budget.

Last year a similar bill was passed that put NC taxpayers on the hook for $344 million, so this year's bill brings the total hit to the state budget over the life of the loans used to finance the gifts to $473 million. That's right, we're supposedly short of cash but the folks in charge have no problem giving away roughly half a billion dollars.

How can North Carolina's Democrat leaders engineer the giveaway of almost half a billion dollars while threatening to cut essential services? Could the threats just be their way to get more taxes for more giveaways? Count on it. NC is not broke, but it will be if the current leaders stay in charge.

Rule of Law?


Not Here. There Are No Rules Here.

Somehow the press has managed to convince the public that there has been fair and open debate in Raleigh. Anyone who actually saw how things have been handled would have a very different impression.

The House Rules this session change on a daily basis. At one point the Speaker even said he was making up new rules as fast as he could, and it was even funny because it was too true.

The high (or low) point came during the budget debate. While some amendments were permitted, many more were rejected by the Speaker without even permitting discussion. I had five amendments dealing with education returned, even though it was clear that several of them were just as appropriate as the special provisions already in the budget.

In fact, one returned amendment would have removed a special provision the Democrats inserted in the budget that would increase state spending while doing nothing for education. The provision gives teachers days off with pay to work on portfolios. Since most teachers and principals believe that the portfolio approach to teacher certification is worse than useless, I think there is a fair chance the amendment ending the portfolio requirement might have been adopted, but we'll never know.

It is one thing for a position to prevail because it has the most votes; it is quite another to use privilege to insert special provisions in the budget without permitting debate and to use raw power to prohibit a perfectly proper attempt to remove the special provisions.

The counterpoint to the subtle suppression of debate by rejecting amendments was the blatantly obvious amendment permitted at 4PM at the end of the budget debate. Just that morning the Speaker had ruled that no amendments would be permitted after 9 AM, but as usual this year, the rules that exist were just made to be broken at the whim of the party in power.

Someone Isn't Telling the Truth . . .


Who Is It?

Before the last election, Republicans told everyone that last year's budget didn't balance and we were headed for trouble because the economy wasn't going to grow fast enough to cover the problems created by the Democrat controlled 1998-1999 legislature. The Democrats said they'd done a great job and R's didn't know what they were talking about. Who was right?

Everyone knows now that last year's budget overestimated revenue and underestimated health care costs, while ignoring the lawsuit the Democrat leaders had to know about (the Governor was the attorney general) as well as the tax refunds that were held so that they could spend more than they should have.

Before the vote on the House budget, Republicans made it clear that we believed revenue was intentionally overstated to avoid making real decisions on spending. The Democrat House leadership assured us that the revenue estimates were sound. Who was right?

Well, less than a week after the budget vote, the Governor told us that the House leadership had a letter from him saying their estimate was wrong before the budget vote. The Democrats' own party leader turned the House Democrat leadership in for misleading us.

Now the Republicans are saying the problem isn't a revenue shortfall but a Democrat addiction to spending. The Democrats assure us they've cut everything to the bone and this is a crisis. Who is right?

As John Hood said recently, you'd better ask to see the bone. The Global TransPork is still in the budget, along with a ton of other special interest giveaways. Maybe Chicken Little did this year's budget.


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Official website of NC Senator Fern Shubert - Republican Candidate for NC Governor in 2004. All rights reserved 2001 2004
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