Budget Surplus: It's About Time

With a surplus estimated as high as $2 billion, Gov. Mike Easley has reason to be euphoric about budget matters this year.

North Carolina has suffered through several years of revenue shortfall and sagging economy, and the time has come to raise wages for teachers and state employees.

On the other hand, our legislators may be in a position to hold the line when it comes to expanding programs and exploring new programs. Moore County’s legislative delegation has indicated a similar position.

The governor has proposed 8 percent raises for teachers and 4 percent raises for state employees. Both categories deserve increases. Teachers and state employees have gone for years with minimum boosts or none at all, and the time is ripe to right that wrong. However, maybe 8 percent is a bit steep for one year. A more measured hike in pay, with pledges for the future, might be more realistic.

Multitude of Needs

As impressive as $2 billion sounds, if indeed the surplus is that big, it is not an overwhelming amount of money to stretch from Manteo to Murphy.

North Carolina is swept up in a multitude of needs crying for prompt attention. Financial issues involving the state budget and Medicaid changes have left a shortfall in the mental health system. The state court system is in desperate need of a quick fix as well. These are serious needs, and it is essential that they receive prompt attention.

Counties need respite from the burden of their Medicaid share. North Carolina remains the only state that requires local governments to shoulder a percentage of that cost. A subcommittee of the House Select Committee on Health Care has already endorsed a plan to provide $65 million in Medicaid relief to counties. That would not cover all of the counties’ share, but it would help.

Careful on Gas Tax

Easley’s ideas about tax cuts are interesting but bear close attention. The legislature should cast a cautious eye at his proposal to cap the gas tax. No one wants to pay a tax of any kind, and this tax is especially heinous now with gasoline prices at a record high.

But if the gas tax is capped, what happens when the roads need more money? Will the state dip into another fund to cover the cost? We’ve already had experience with state “borrowing” from trust funds and reducing reimbursements to cover costs when revenues drop.

A proposed quarter-cent reduction in the sales tax is attractive and makes more sense. The sales tax was upped a few years ago, presumably as a temporary measure at a time when the sluggish economy was digging a deep hole into revenue collections.