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The more things in Raleigh change the more they stay the same

Chris Fitzsimon

Nobody talked directly about North Carolina’s sputtering economy and budget problems at meetings of two high-level panels Jan. 14, but the anxiety wasn’t far from the surface. And neither were signals that make it hard to imagine any serious reform proposals emerging from either group for quite a while.

The Joint House and Senate Finance Committee spent the morning listening to detailed presentations about the sales tax and how North Carolina compares to other states in what it taxes. There is widespread agreement that the tax code is out of date and that expanding the sales tax to include more services makes sense, and more closely ties the revenue system to the state’s economic activity.

Several high-powered commissions have recommended broadening the sales tax rate in the last several years. The joint finance panel was created last summer after Senate proposals to expand the sales tax became a sticking point in final budget negotiations.

Thursday’s meeting was the first one since some legislative leaders said publicly that tax reform is unlikely this year. That prompted House Minority Leader Paul Stam and other Republicans to call for a tax proposal to consider instead of attending more information sessions.

It is no secret that politics is the primary reason tax reform won’t come up in 2010. Democrats are worried about the November elections and would rather not take any chances or anger any wealthy special interests until the election is over.

Stam is playing politics, too, of course. He wants Democrats to come forward with a sales-tax plan so Republicans can mischaracterize it and make it a central part of their fall campaign.

Somebody needs to ask Stam where his tax-reform proposal might be. All he has really offered so far are proposals to make it harder procedurally to raise taxes in the future. That’s not reform, that’s a talking point.

Not long after the tax commission adjourned, Gov. Beverly Perdue’s Budget Reform and Accountability Commission held its third meeting in its quest to find savings and efficiencies in state government to help the budget crisis.

The commission is stacked with well-connected political heavyweights who know their way around Raleigh, but watching the committee operate doesn’t inspire confidence that it will recommend dramatic changes.

Thursday the commission directed state agencies to come up with better ways to manage the state’s procurement process and put off discussion of the ongoing problems with local Alcohol Beverage Control Commissions that have made headlines recently.

Commission members seem sincere about their work, and maybe they can come up with some long-term improvements in the way the state operates, but don’t look for any big savings in the short term.

IBM executive Curtis Clark told his fellow members about the difficulty in reorganizing state government, and Clark should know. He headed the 1993 Government Performance Audit created during the budget crisis of 1991.

Some of the audit’s smaller recommendations were adopted, but the proposals for significant changes were largely ignored. It’s striking how similar the language in the 1993 audit is to the discussions held last week about state purchasing and technology management.

North Carolina desperately needs tax reform, and a more efficient state government wouldn’t hurt either. But Thursday‘s events don’t lead you to believe that either one is coming soon.

The more the names and faces change, the more the special interests and political considerations stay the same.

Chris Fitzsimon is executive director of N.C. Policy Watch.

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