Just when you thought things couldn’t get any worse

The NC Senate pushes a bevy of last minute constitutional amendments to lock in the state’s decline

The conservative revolution in North Carolina: It’s been such a whirlwind for so long now that it’s easy to lose track of how far and fast we’ve fallen and how extensive the damage has really been. Fortunately, if your stomach and psyche can handle it, there are some useful resources out there to refresh your memory. Last fall, NC Policy Watch published a special, one-of-a-kind report entitled Altered State: How 5 years of conservative rule have transformed North Carolina. And for those looking for pithier summations, it would be hard to do better than Professor Gene Nichol’s essay in this past Sunday’s edition of Raleigh’s News & Observer, “Making the case that lawmakers are destroying North Carolina.”   

As Nichol observed darkly in the introduction to the piece:

“When I read the other day that lawmakers are now telling schools how to teach math, I remembered Lily Tomlin’s quip: ‘No matter how cynical I get, it’s impossible to keep up.’ We’ve gotten used to a lot of insanity during this campaign to destroy the meaning of North Carolina.”

Boy, was Nichol right. Indeed, the downward spiral continues at such a pace that things have taken another destructive nosedive in just the hours since his essay appeared.

Last minute constitutional amendments

The latest and what might well end up being the most destructive development in this unhappy saga occurred yesterday in the North Carolina Senate when 32 men and women voted to advance legislation that contains a series of three new amendments to the North Carolina Constitution – two of which were appended onto the bill for the first time just last Friday in the latest kangaroo session of the ironically-named Senate Rules Committee.

Part 1 includes the original content of the bill (a Tea Party-favored constitutional amendment to state eminent domain law) that senators have allowed to lay fallow in committee since February of last year. It would be bad enough if this were being raised in the session’s dying hours with so little attention in the almost 17 months since it passed the House.

But, as is so often the case in Raleigh these days, the proposed bill is a multi-pronged policy cluster bomb.

Part 3 of the bill includes a downright bizarre addition to the foundational law of our state that would guarantee – we’re not making this up – the constitutional right “to hunt, fish and harvest wildlife.” There’s no word yet on whether the sponsor of the provision – a mostly anonymous Senator and failed congressional candidate named Andrew Brock who recently pulled in a whopping 2,803 votes in the June Republican primary in the state’s13^th congressional district – sees this as a means of providing physical sustenance to the people of the state after conservative ideologues get through with the economy.

Part 2, however, is where the most dangerous and damaging constitutional amendments reside. As the official legislative staff summary explains, it would ask North Carolinians to vote this November on whether to:

• Cap the income tax at 5½% (currently capped at 10%) beginning next January 1, and
• Create a new constitutionally required Emergency Savings Reserve Fund to which the General Assembly would be required to reserve 2% of the state budget each year. Bills declining to make the required reserve and bills appropriating money from the Emergency Savings Reserve Fund, would require a 2/3 vote of both houses.

Making the damage permanent

What this means, of course, is that Senators propose to do their utmost to make the damage of the past several years permanent. Unhappy with the possibility that voters might opt to change directions in the state by electing a new majority of state leaders with a different agenda that doesn’t involve repealing the 20^th Century, they propose two destructive changes:

First, they would lock in the destructive budget cuts and the regressive tax shifts of recent years by artificially capping state income taxes (the only taxes that do anything significant to make the wealthy pay their fair share). As state fiscal policy expert Alexandra Sirota noted in a blog post yesterday:

“Policymakers have already set a low, arbitrary income tax rate for individuals and profitable corporations, which will drop to 5.499 percent for individuals in January 2017 and eventually to 3 percent for businesses.  These changes began in 2013 and will continue to phase in, ultimately reducing the dollars available to invest in schools, parks and public health by at least $2.5 billion each year. More than two-thirds of the tax cut from the low individual income rate has benefited the top 20 percent of taxpayers. Policymakers continue to pursue a shift to the sales tax to make up for the revenue loss, which means the tax load has shifted to middle- and low-income taxpayers.”

Second, they would tie the hands of future state leaders by placing a double padlock on the rainy day fund (the principal fiscal fire extinguisher at their disposal to deal with future potential budget emergencies that might be brought on by, say, a major hurricane or the next stock market collapse). To make matters worse, they would actually require the state to continue to set aside hundreds of millions of dollars each year into the fund – even in the midst of future fiscal emergencies – unless lawmakers secure a 2/3 super majority.  

Again, here’s Sirota:

“The proposed changes to the management of the Rainy Day Fund represent another example of enshrining in the state Constitution something that can already happen while forcing the negative effects on North Carolina communities and future generations.

Requiring a 2-percent deposit of revenues into the Rainy Day Fund annually reduces the dollars available to meet current unmet needs in our classrooms, clinics and courts. The approximately $$450 million that would be deposited in the Rainy Day Fund each year is roughly equivalent to the entire investment in teacher pay raises proposed by lawmakers, for example. This mandate reduces the flexibility needed to align decisions about spending and saving with the economic conditions and community priorities at the time.

Second, requiring the mandatory deposit to the Rainy Day Fund every year regardless of economic conditions or community needs is counterproductive.  Such a requirement brings into question what policymakers are saving for while at the same time failing to deliver the stability to keep existing commitments supported in good times and bad. Pew Charitable Trust notes in their analysis of best practices in Rainy Day Fund management that the better policy is to allow flexibility and to consider linking savings contributions to things like the occurrence of above-average revenue or economic growth.”

Add to this the fact that the new fiscal hamstrings would mirror in many ways the disastrous TABOR experiment in Colorado and quite possibly jeopardize the state’s ability to maintain its AAA bond rating (and thereby, its low cost of borrowing) and the risks from the proposal grow even more worrisome.

Going forward

The Senate is expected to give final approval to the constitutional amendment legislation later today. After that, it’s unclear what will happen next. Rumor has it that, as with last year’s TABOR spending cap amendment, House leaders are less enthusiastic about the legislation. That said, the sausage grinding and horse trading that takes place in the waning hours of a legislative session – especially in this General Assembly with its overall aversion to rules and process – can and often does produce loathsome results. Stay tuned and keep your fingers crossed that sanity prevails.