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A sigh of relief

Chris Fitzsimon

The 2009 General Assembly session will adjourn in the next few days, but the battle to characterize the session is already well underway. A recent News & Observer story carried the headline “Democrats tax hikes tickle GOP,” referring to the roughly $1 billion tax increase in the final budget agreement.

Gov. Beverly Perdue signed the $19 billion budget Friday but there was no ceremony, just another confusing statement from the governor, who said that she signed it with reservation and that she wished it had done more for education. And she’s supposed to be on the Democratic legislators’ side.

The Republicans seem more than tickled that the Democrats raised taxes; they seem downright giddy, already dreaming of the commercials they can run in 2010. House Minority Leader Paul Stam is talking about picking up as many as 12 seats, which would give the Republicans control of the House for the first time since 1998.

The Democrats will have something to say about that of course, though many of them are privately worried about the political implications of the tax increase. They were worried last fall too, when after checking their polls they said publicly that no tax increase would be needed to balance the budget.

Perdue even said more than once that it’s not a good idea to raise taxes in a recession, parroting a Republican talking point that is simply wrong. Most economists believe that it is better for a state to raise taxes than deeply slash services and lay off thousands of workers.

Many Democrats still don’t seem to get that and seem almost apologetic for raising taxes. Prominent political consultants are adding to their angst, pontificating that the combination of tax hikes and budget cuts in the budget made everybody mad and is likely to spell disaster at the polls.

It is true they didn’t raise revenue in a very progressive way, and like in any budget there are plenty of individual things to complain about, the athletic booster club subsidy prominent among them.

But Democrats raised taxes because they did not want to lay off teachers. They raised taxes because they didn’t want to kick thousands of kids off Health Choice or fire several thousand teaching assistants or renege on a promise to take over the cost of Medicaid from counties.

They weren’t backed into a corner. They were aggressively defending the state’s vital institutions. Perdue’s probably right that lawmakers should have raised more revenue and softened the cuts to public schools and human services even more.

And several legislative leaders still looked out for their own districts and priorities first. The university system still seems a higher priority at budget time than other important parts of state government. There are dozens of funding choices that are hard to understand.

But the General Assembly that faced the worst economic crisis in a generation at least rose to the challenge of protecting some of the state’s most important institutions. And they did it amid some of the most misleading rhetoric flying around Raleigh in years: the misrepresentation of revenue numbers and the state’s tax rankings by Republican legislative leaders, the absurd suggestions by the market fundamentalist think tanks (like the proposal to abolish the state’s affordable-housing program) and the constant drumbeat of talk radio and the right-wing blogosphere.

GOP Chair Tom Fetzer told reporters that no one will be “clamoring for the pen that was used to sign this year’s budget.” No one ever clamors for a tax increase. But no one wants to see public schools devastated, thousands of workers fired and the most vulnerable people in the state abandoned either.

Those were the choices, no matter how many ways Fetzer and Stam try to spin it. The GOP may be tickled with the tax increases, but considering the alternative, the public ought to be breathing a sigh of relief.

Chris Fitzsimon is executive director of NC Policy Watch.

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