The Senate fiscal year 2007-08 budget would have spent $1.3 billion (7.1 percent) more on operations than the previous year, plus another $1.2 billion in new debt.
The Senate would have allowed the 8.0 percent personal income tax bracket and the extra quarter-cent sales tax to expire as current law requires.
The Public Staff is an independent government agency whose role is to represent the interests of electricity consumers before the Utilities Commission. However, as recent examples demonstrate, the Public Staff is acting more like an environmental advocate than a consumer advocate. The Public Staff has recommended a major new tax on consumers, possibly as large as $181 million annually. The Public Staff also has expressed support for wind power plants even though it would mean higher costs and an unreliable means of electricity for consumers. The agency needs major reforms so consumer interests are truly protected, including term limits on the executive director of the Public Staff.
North Carolina lawmakers are once again coming to Raleigh to grapple with a projected deficit exceeding $1 billion. A close examination of fiscal trends demonstrates that excessive spending, not inadequate revenue, is the cause and that the state budget continues to be bloated with wasteful or low-priority expenditures. Policymakers must show courage, be willing to apply fundamental principles, and target major areas of state spending for savings and reform.
Former Indianapolis Mayor Stephen Goldsmith said that one of the greatest challenges facing local government is how to do more with less. This is certainly true for local governments in North Carolina. In the past two years, they have had to adjust to significantly more stringent budgetary constraints. This was brought on, in large part, by Governor Easley’s decision to withhold state reimbursements to counties and municipalities. Because of this localities are being forced to find innovative ways to balance their budgets.
For all the talk of a fiscal crisis this year and the need to tighten the belt of state government, Gov. Jim Hunt's proposed adjustments to the FY 2000-01 budget would hike General Fund operating spending by nearly 7 percent, vastly increase state debt, and deplete state savings accounts for many years to come. The budget also contains many new items of questionable merit. North Carolinians should not be surprised to see sizable tax increases in the future as a result.
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