Back to the drawing board
As you may have heard, Speaker Hackney held the Dems together tonight, soundly rejecting the Senate's budget bill. Plus three R's jumped ship to vote against the Senate's $1.2 billion Certificates of Participation (COPS) funding scheme. Now the House and the Senate have the month of June to confer.
What would you like them to confer about? They'll obviously have to start with reaching agreement on the revenue side of the equation. Here's my early thinking:
1. Kill the .5% temporary sales tax increase.
2. Kill the .5% temporary top-tier income tax increase.
3. Kill the state Certificates of Participation.
4. Let local jurisdictions have their own COPS if they want them.
5. Establish a new 1 - 2% permanent increase in the top-tier income tax.
Once that's done, then we can talk about spending. The truth is, there are far more needs than there are dollars to go around. So the least we can do is make the revenue picture more progressive and empower more local decision-making.
Pile on.
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I like your list
And I think the more local we can make it, the better off we are - with one caveat.
There are those of us who count ourselves progressive who are represented in a totally red district. Our US Senators, Congressman, State Senator, State Representative, and County Commisioners are all card carrying members of the GOP. Those of us in the red republics rely on the Democratic legislature to do the right thing at the state level.
I would love to see Speaker Hackney and his associates establish a set of progressive standards by which the spending priorities would be set. Barring that, I would like to see emphasis on programs/priorities support improved health care and education without pouring billions into corporate pockets.
Is that general enough for you? :-D (sorry to be so non-specific.)
_____________
General, colonel, major, captain
It's all good.
:)
My desires:
1. Eliminate pork-barrel spending
2. earmark that pork spending toward making North Carolina's education the best in the Nation.
3. require every tax dollar collected from us to be identifed as to where it is going. If a politician feels that strongly about a program, then claim it and the price tag for it. If your to cowardly to claim it for all to see, then do not propose it or hide it in amendments.
4. budgetary line item veto of up to say 30% of line-items from each side of the Isle? But also explain why your vetoing that line item. I so hate tag-along items. Vote on them, propose them, stop the back door back scratching.
Of the 4 listed, guess the one that could really be worked on now would be item 2. Our kids truely deserve it. You can drop the pork spending portion, just start with "making"...
an ignorant question...
...if i may.
why is the state lege pushing cops, and for what?
as i understand it, the difference between a cop and a general obligation bond is that the cop is not based on "full faith and credit", instead being funded by each successive (annual or biennial) budget over the life of the project.
but i had the impression that these cops were used for specific capital projects, and that the lender's recourse if the lege chose not to fund repayments for a particular cop is to deny the state access to the asset funded-a reposession, if you will.
this makes no sense, however, if the intent is to cover "general fund" operations, as there is nothing to "reposess", suggesting interest rates would be unnaturally high, as the risk would also be unnaturally high, since the cop would lack "collateral".
speaking of interest rates, there seems to be no real interest rate benefit to the state.
in fact, this analysis from oregon suggests at current interest rates, the savings per $100 million is only about $2,000. of course, this analysis is based on using the cop for a capital project.
if it was used to pay for general obligation fund operations, it is reasonable to suggest the rates might be higher than a general obligation bond.
the only other reason i can think of to use cops would be if the state's ability to issue general obligation bonds was somehow limited (close to ratings limit, for example), and the lege was again willing to pay that higher rate for greater risk.
all that said, there must be more to this story than i understand.
what can you tell me about all this?
I Like parmea's #3
I like it so much I'm going to repeat it.
Re: COPS - (strange name) fake answered one of my questions - namely - what the heck is it - so - if this be true:
What are the projects? Did you miss it? What are the projects?
What I'd like to see:
a) mental health fully funded, and funded within a model framework that other states can emulate but not so generous every person in the country wants to come here for services.
b) schools - mm..hmm..if each county had a way to generate revenue, theoretically, the state could spend a little less in that category. The Transfer Tax may not be a perfect vehicle but at least it's *a* vehicle.
From -A-'s list:
1. Kill the .5% temporary sales tax increase. I wouldn't kill it; I'd modify it. Take the sales tax off food and medicine. If you can afford an HDTV, you can afford 1/2% tax. That tax would buy someone else another 1/4 of a banana. YMMV.
2. Kill the .5% temporary top-tier income tax increase.
This isn't me and it never will be me. Is it fair? Is investment income taxed as regular income? Where does this money go? Into the general fund? Are those people getting anything back on their investment to the state? There are ways to make that more fair - but I won't go into them here. Curious? Ask me.
3. Kill the state Certificates of Participation.
Weird name. Are those interest rates higher than usual? It was my understanding that NC had a stellar credit record; why pay more when we don't have to? And any project funded should be spelled out in detail. Perhaps voted on by the public. Quit bribing companies to come here and invest in local talent.
4. Let local jurisdictions have their own COPS if they want them.
Covered above? You tell me.
5. Establish a new 1 - 2% permanent increase in the top-tier income tax. Erk. NC taxes are too high as it is. Of course, if it keeps people from flooding the place - bring it on! We'd have to advertise though. :)
I love North Carolina. I chose this place out of every state in the Union. We have remarkably clever people from all walks of life. I'd like to see some revenue invested in the people and our natural beauty protected.
What I'd hate to see is North Carolina made so beautiful to others that the native people are crowded out and forced to move somewhere cheaper. Although I'm not a native, this could happen to me. Believe me when I tell you, I'd be pissed.
my questions about interest rates...
...are threefold:
--if cops are tied to capital projects, then the interest rate would in theory be higher if the state was using the cop to evade a borrowing limit on general obligation bonds.
the interest rate would also depend on the lender's interpretation of the risk that the state would choose not to fund payment on that certificate in any particular budget cycle. high confidence, low rate.
--if, on the other hand, there was not a capital project tied to a certificate (for example if a cop was used to supplement the funding of mental health services delivery), theory again suggests the interest rate would "bump" up, again due to the lack of collateral to secure payment on the certificate.
--finally, if, even in the best of circumstances, the amount of interest savings is so small, why even have this sort of instrument?
that seems like a topic worthy of further research.
How about
don't borrow money for construction projects. As I've said before, spending dollars that haven't been collected yet is easier than it should be, and it tends to postpone scrutiny of the cost/benefit of the project itself.
Funding current programs comes first, taking care of shortfalls that impact the health and well-being of citizens (especially children) is next, and if there's no more money left, start planning for next year.
we borrow for these projects for some of the same reasons that..
...homeowners don't save up their money first and then buy houses for cash:
--inflation-this is a major problem when building projects: if you wait 10 years to buy the land, you pay more.
taxpayers save money by buying land for public construction as soon as possible. same with design, materials and labor.
--use value-would you rather live in an apartment saving your money, or paying off your mortgage and having a bbq out in the back yard?
public projects take the same principle to a higher level, but the concept is the same.
--availability of contiguous land-some projects are easier to do now rather than later because the land just won't be there later.
state parks are an example of this concept.
hardly a complete list, but it's a start.
That all makes sense,
but it doesn't really address my assertion that the aura of borrowing (even for future savings) circumvents the discussion about the actual necessity of the project, and whether it will provide a suitable return on investment.
This (imo) is the danger of successive annual borrowing, because it changes the way we look at revenues in general, and can lead to a false/misleading budgeting formula.
i did not address that assertion...
...because it's not entirely inaccurate nor does it require clarification.
i think you do raise a valid point that is worthy of consideration.
however, it is possible (and not uncommon) to use future borrowing potential wisely, as well. in my experience, capital spending usually is highly visible, and thus a state lege is forced to be a bit more careful with the money. as examples, consider the schools, roads, sewers, and airports that represent wise investment that we use every day as a counterpoint.
an area of debt that is more central to your concerns might be "ongoing operations" debt (the issuance of bonds to cover current, "general fund" spending-essentially passing today's costs of government to the future) and that is an area of spending that should have us all greatly concerned, as "programs" tend to be more vulnerable to poorly planned spending than "projects".
you may not like the solution, however-raising current taxes to pay for reasonable and wise current spending. (borrowing money to pay for school operations, or to fill a state's "rainy-day" fund are examples of bad borrowing. raising taxes to cover the reasonable portions of that spending, or to fill that fund-good spending...)
of course, fools can spend saved cash just as foolishly as future cash, and that may be the bigger problem for taxpayers.
as with freedom, the price of being a taxpayer is eternal vigilance, i suppose.
So --
Is this conference committee only on the budget? Or does it cover the differences between the House and Senate on all bills?
And how do you find out who's on the conference committee(s)?
But your list looks good to me. Sure, repeal the temporary tax, but make a permanent increase on the top tier. Really, taxes are not so high in this state that we couldn't afford to provide a disincentive to all the millionaires moving into the mountains.
Oh, and as for providing counties with more ways of raising revenue, permitting a different property tax rate for primary vs. secondary homes would be a start.
every bill
has a conference committee if the senate and house versions are different. Usually it is pretty mundane. For the budget it will be people appointed by Hackney and people appointed by Basnight who will then talk and bring something back to each full body to vote on.
Draft Brad Miller-- NC Sen ActBlue