John Hood column: Rand was just being honest

Published 12:00 am Tuesday, January 6, 2009

RALEIGH ó I know the quote isn’t new, but I’d like to take this opportunity to call attention once again to what Senate Majority Leader Tony Rand said last month during a public appearance at Fayetteville Tech.
Discussing North Carolina’s expected budget deficit for FY 2009-10, currently estimated at somewhere between $1.5 billion and $3 billion, Rand remarked that, “We’ve thrown money away in the past. Now, we’re going to make sure we can justify every penny we spend.”
Rand’s candor invited some equal candid responses around the political world, ranging from ridicule to opprobrium along the lines of “what do you mean ‘we’?” But it’s worth considering for a moment that the senator is a smart and experienced state politician who knew what precisely what he was saying and how it would be perceived.
The fact of the matter is that anyone who has spent any significant time around the General Assembly knows well that Rand is correct. The state budget is full of waste, redundancy and programs of dubious effectiveness. The problem has never been about public policy, about identifying areas to economize. The problem has been a political one. In most cases, the state spends many millions of dollars on questionable priorities because lawmakers have more of an incentive to placate spending lobbies, who are targeted and influential, than they have an incentive to placate the general population of taxpayers.
History shows that only during recessions or major political transitions is it likely that lawmakers will overcome the political obstacles to fiscal restraint. If you adjust state spending for inflation and population growth, you generate a trend line that drops a bit during the recessions in the early 1980s, early 1990s, and early 2000s, plus a drop in 1995 after the GOP takeover of the N.C. House. In all other years, the line slopes upward ó way upward in the cases of the late 1980s, the late 1990s, and the period from FY 2003 to FY 2008.
Because these upswings in state spending growth were larger and longer than the recessionary downswings, the long-term trend is a substantial increase. Real state spending per capita today is 27 percent higher than it was 20 years ago. Obviously, the state budget would have to shrink quite a lot to offset the massive state spending increases of the 1990s. I’m not suggesting that the General Assembly will do so, or even that it should do so in a single year. But I will point out that North Carolina was still an attractive place to live and work in 1989, before the reckless fiscal policies of the ensuing years, and North Carolinians have not experienced large enough benefits ó in better student performance, health outcomes, or public safety ó to justify that 27 percent real increase in the scope and cost of state government.
Here’s hoping that Rand’s comments about the need for economical government in North Carolina translate into action. There is no shortage of good ideas on how to go about it.
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John Hood is president of the John Locke Foundation.


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