GOP Takes NC Assembly, Stuck with Huge Budget Shortfall

Published November 15, 2010

The last time Republicans controlled the North Carolina legislature, lawmakers came to Raleigh by horse and buggy. But after more than a century of Democratic Party rule, Tar Heel State voters were in the mood for a change Nov. 2, electing the first Republican majority since 1898.

It’s an historic opportunity for the GOP, but one tinged with apprehension by an estimated $4 billion budget shortfall. The legislature’s longtime Democratic leadership put off the fiscal pain during this year’s legislative session by passing a $20 billion spending plan that partly relied on an extension of federal stimulus funds and more than $1 billion in expiring tax cuts.

In 2011, the new GOP majority won’t have that luxury.

“If we’re going to do this right, then we can’t create artificial boundaries, things that can’t be on the table,” said state Rep. Thom Tillis of Mecklenburg County, a top leader in the GOP caucus. “We’ve got to look far beyond where past legislatures have looked to try and balance the budget and get to a more fiscally sound baseline.”

Chopping Block
That means bureaucracies will have to be cut, Tillis said. Already, university system leaders say it will be necessary to raise tuition rates and possibly shut down one of the system’s 17 campuses. Gov. Bev Perdue (D) has asked each cabinet-level agency to submit plans for 5 percent, 10 percent, and 15 percent budget cuts.

Republican leaders say tax hikes are off the table.

“That will be a real challenge, and we have to do it because we’ve got to get our tax rates competitive,” said Republican House Leader Paul Stam of Wake County.

Many people expect state workers to be cut loose.

“The unavoidable reality is that roughly 70 percent of the state budget is dedicated to salary and benefits of state employees,” said Brian Balfour, budget and tax policy analyst for the conservative Civitas Institute. “I wouldn’t be surprised to see lawmakers consider furloughs, eliminated positions, and cost-sharing for health insurance and pensions.”

Likely Squabbles
The day after the election, Perdue issued a statement saying she looked “forward to working” with the GOP. But it might not be easy, because Republicans have a veto-proof majority in the state Senate and near-veto-proof majority in the House.

Perdue must propose her budget first. Then the General Assembly gets a crack at it.

N.C. State University political science professor Andrew Taylor said Perdue could benefit from having Republicans as a foil, but in light of her poor polling numbers, she’ll need to invigorate her standing with the electorate as the 2012 election gets underway.

David N. Bass ([email protected]) is an associate editor of Carolina Journal, published by the John Locke Foundation in Raleigh, NC.