Overriding a veto by Gov. Beverly Perdue (D), both houses of North Carolina’s legislature have implemented a budget that cuts taxes, reduces public spending, and makes significant changes to the Tar Heel State’s environmental policies.
Environmental Bureaucracy Slashed
With its historic June 15 veto override, state lawmakers gave their approval to a two-year, $19.7 billion budget that went into effect July 1. The spending plan eliminates 160 positions in the Department of Environment and Natural Resources, or about 5 percent of the department’s workforce.
Legislature Must Approve Restrictions
Not only did lawmakers cut the department’s funding by more than 12 percent, they also mandated a far-reaching policy change. The agency is now prohibited from issuing regulations more stringent than the minimum standards contained in rules imposed by the federal government, unless expressly directed to do so by future legislation.
Economy Expected to Benefit
With an unemployment rate of 9.7 percent (compared to a nationwide rate of 9.2 percent), North Carolina is facing budget shortfalls and a slumping economy unable to turn itself around. The state’s Republican-dominated legislature decided the budgetary and regulatory status quo offered no way out of North Carolina’s economic doldrums, and they voted accordingly.
“We had cuts to make. We had to make them, and wherever you make them you are going to get blamed. It doesn’t make any difference,” said Roger West (R), cochairman of the House environment budget subcommittee, according to Bloomberg Businessweek on June 3. “I think some of the regulatory change will help business—I see no way for it not to.”
Emphasis on Accountability
Daren Bakst, director of legal and regulatory studies at the North Carolina-based John Locke Foundation, says it was important for the legislature to ensure accountability for future environmental restrictions.
“The state legislature, and not unelected and unaccountable state bureaucrats, should decide whether North Carolina should impose extra costs on its citizens by exceeding federal standards,” Bakst said. “This is not an anti-regulation measure, but a good government measure. If elected legislators want to go beyond federal standards, then they can always do that.”
“Critics of measures to prohibit agencies from exceeding federal standards make a red herring argument that somehow the state is somehow giving up its state sovereignty,” Bakst explained. “This would be accurate is there was no state legislature.”
Regarding the budget cuts, Bakst said North Carolina had little choice.
“North Carolina like most states has to reign in its spending. The North Carolina legislature saw an agency that was spending too much, was bloated, and has unnecessarily harmed economic growth. Making targeted cuts to this state behemoth was a wise choice,” Bakst observed.
Funds to pay for land acquisitions by the state also felt the blow of the budget axe. North Carolina’s Clean Water Management Trust Fund, originally set to receive $100 million per year for the next two years, will have to make do with $11.3 million annually.
Bonner R. Cohen, Ph. D. ([email protected]) is a senior fellow at the National Center for Public Policy Research.