Our View — Senate budget needs work

There’s a big difference between conservative spending plans and reckless ideological penny pinching.

North Carolina’s Senate appears to be choosing the second route.

A story in our Friday edition detailed how the Senate’s budget proposal would save the state more than $200 million over the next two fiscal years by eliminating nearly 7,000 teacher assistants. Wednesday’s edition included a story about how the Senate budget “calls for a new cap on individual income tax deductions for charitable donations and the taxation of larger nonprofits with a state sales tax.” Itemized tax deductions for donations would be capped at $20,000 and nonprofit sales tax refunds would drop from $45 million to $1 million by 2020.

The Senate has also proposed changes to the way the state distributes sales tax revenue by county. “The formula now in place directs most of the money to the county where a sale occurred – an approach that favors urban counties where rural residents typically do their shopping,” according to an article published in the News & Observer on Tuesday. “The Senate budget would change that and allocate much of the money based on population, which has the effect of offering a boost to small, rural counties. Urban counties could lose millions – something some House members strongly oppose.”

Those are all preposterous ideas and, ideally, the House will talk some sense into their colleagues in the Senate when the two bodies convene to negotiate a final budget.

There’s room for reform in the way the state funds education but it’s far more likely that, over the long term, education can be more viable with a county-by-county evaluation of administrative practices and accounting. Teachers, and teacher assistants, aren’t generally known for big spending on pet projects — but administrators are. A more efficient and accountable system, overall, is a far better solution than removing teacher assistants, which most educators agree play a vital role in the classroom.

Taxing charitable donations and large nonprofits is also the wrong thing to do. The state doesn’t need, or deserve, any portion of any person’s donation to a charity or nonprofit. Nonprofit groups are still feeling the sting of recession and fundraising is as difficult as ever. Organizations that do good work in their communities don’t need the decline in services that would result from having funding siphoned off by the state.

The new scheme for the disbursement of sales tax revenue by population drew some references to Karl Marx in the North Carolina House — a bit hyperbolic, for anyone familiar with the ideas for which Marx actually stood. The plan does, however, have a decidedly leftist flavor, which makes its origin all the more surprising. Sales tax revenue should stay in the county where it was collected. If that means that Mecklenburg County keeps sales tax paid by Lincoln County residents, then so be it. Tax policy should be all about fairness, and the Senate’s proposal is anything but.

Chuck GivensComment