Point of View

Taxpayer bill of rights: A failed track toward a second-rate state

March 18, 2013 

There was a time when North Carolina was a leader, not a follower. Our efforts to fight poverty, attract global businesses and nurture a well-educated, highly skilled workforce were models for other states to follow. North Carolina policymakers forged their own solutions to the state’s problems, expanding opportunity and improving the economy for everyone.

Today, North Carolina’s leaders are taking a very different approach. They want to import failed policies from other states to address problems that don’t exist.

A good example is legislation that lawmakers are pushing again this year that would impose an arbitrary cap on state spending. The idea, which is sometimes misleadingly referred to as the Taxpayer Bill of Rights, or TABOR, would limit vital investments in our schools, colleges, health care and roads, dictating that they could grow no more than the rate of population growth plus inflation, no matter what resources we may actually need to be able to compete in a global economy.

This kind of arbitrary formula is a gimmick that doesn’t allow legislators to do anything that they can’t already do. In fact, it would remove the ability of legislators to adapt to changing circumstances. And the more people know about the consequences, the less popular these limits on public needs and aspirations have become.

Just last fall, voters in Florida soundly rejected the restrictions, becoming the 30th state to do so in recent years.

The reality is that state spending is at a 40-year low, and we are already falling behind in all of those areas – and in so much more. As anyone who has been in a crowded classroom lately or seen the lines at the unemployment office knows, the problem facing North Carolina is not over-spending. It’s exactly the opposite.

North Carolina is facing a crisis of its own making by failing to invest enough in the foundations of economic growth, leaving the state with high unemployment and consumers who are scrimping rather than spending.

Spending-cap legislation will only make things worse. It would lock in years of cuts to our schools, transportation system, public safety and other services made during the Great Recession. Some of the most important services, like education and health care, would erode much further over time, because their costs routinely grow by more than would be allowed under the spending formula.

Moreover it would not guarantee that dollars are spent well. For North Carolina, substandard would become the new normal.

That’s exactly what was happening in Colorado, the only state that has ever put such tight handcuffs on its future, before voters there said “Enough!” and put an end to the disastrous 13-year experiment in 2005. Funding for K-12 education, colleges and universities had plummeted to near the bottom for the nation. The share of low-income children without health insurance had doubled. Roads and bridges had fallen in significant disrepair, and congestion costs represented a drain on the state’s economy.

That’s why it’s so surprising that North Carolina policymakers would consider such a failed policy here. North Carolina is at a critical point in its economic recovery. The governor and legislature have an opportunity to repair at least some of the damage caused by cuts made throughout the Great Recession. Rather than consider artificial constraints, they should make investments that ensure every child is ready to learn and receives a quality education, that allow us to build an infrastructure befitting a globally competitive state and that provide care for the sick and elderly.

Much of what makes North Carolina a great place to live and do business would be undone by these budget restrictions. Our policymakers should not force North Carolina down the same dangerous path that Colorado took. Instead, like leaders before them, they should forge a path that reinvests in North Carolina and restores its reputation as an exporter of great ideas.

Cedric Johnson is a public policy analyst at the N.C. Budget and Tax Center.

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