If you come to the end of the year and you’ve got surplus money in the bank what do you do? This seldom happens in most homes, but would you spend it? Save it? Or, with a government, would you return some of it to the people who sent it? That’s the option Senate President Pro Tem Phil Berger raised recently.
The state has almost $900 million more than budget analysts projected for this last fiscal year. Much of that is the result of the state’s strong economy, some is the result of last year’s federal tax changes, and some was due to state agencies not spending all allocated to them. The issue is what to do with the surplus.
Here’s the Republican perspective. “This is what good government looks like,” they boast. “Since we took charge in 2011, we’ve cut taxes, made government more efficient, increased budgets for schools, road construction, healthcare and even stockpiled savings for the next rainy day.” Their first instinct is to stash more into savings and perhaps consider returning some of it to the people. Republicans will quickly tell us this is “one-time” money, meaning it may or may not reoccur in the current year. For that reason we shouldn’t go on a wild spending spree. Some Republicans will even say this is evidence that taxes are too high, and we should cut them again.
Democrats see this entirely differently. “Here we are in one of the great economic expansions in modern history and all our Republican leaders want to do is cut, cut, cut,” they say. “And the folks who get the biggest benefits from these cuts are the wealthy and corporations.” We’ve already got more than $1 billion in savings, but Berger is wrong by saying the state received more than it needs. There are serious needs unmet in education, healthcare, public safety and public infrastructure. We’re not going to create a better tomorrow by starving today’s needs and certainly won’t cut our way to a greater tomorrow. This is a time to invest in our future.
Legislative leaders introduced a bill that would return some $680 million to taxpayers, with a maximum of $125 per person or $250 per couple. The remainder would go to the Rainy Day Fund. Senate Pro Tem Berger and House Speaker Moore maintain this is a stewardship issue for some 5.1 million to receive refunds; about 350,000 would get refunded all the state income taxes they paid.
The bill may not pass the legislature; even if it did it’s likely to earn another Cooper veto. It could establish a precedent for taxpayers to demand refunds of future surpluses. But this is good politics, coming before an important election in 2020.
Wouldn’t it be nice if our elected leaders could celebrate our good fortune and not insist on an “either, or” scenario where one party had to win and the other lose? What if they worried less about being right and more about doing what’s right for our state? Is that too much to expect?
Tom Campbell is former assistant N.C. treasurer and is creator/host of NC SPIN, a discussion of N.C. issues on UNC-TV.