Guest column – Lawmakers miss big picture

By Rob Schofield

Though it is too early to measure the full impact of the 2003 session of the N.C. General Assembly, a basic pattern is clearly evident.

While state policymakers are willing to consider and adopt specific solutions that address specific problems confronting people in need, they remain unwilling, or at least unable, to attack the central structural problems that confront the state:

* The chronic and growing wealth and income gaps that continue to divide the state’s poor and middle class from its wealthier residents.

* The ongoing fiscal crisis that has been brought on by an increased demand for services and the state’s unfair and inadequate tax structure.

On what could be called the “micro” level, lawmakers passed some important bills that will have a positive impact on vulnerable people – while at the same time defeating or delaying some that would have hurt. Victories for those in need included:

* The defeat of industry-sponsored legislation to bring back state approved, predatory “payday lending” in North Carolina.

* The passage of a bill to expand and streamline eligibility for unemployment insurance for victims of domestic violence and persons forced to leave work due to family hardships.

* The passage of an important consumer protection package to protect purchasers and owner of manufactured homes.

* Gov. Mike Easley’s veto of a proposal that would have allowed consumer finance companies to charge much higher fees on already high cost mortgage loans.

On the “macro” level, however, the picture is much less bright.

The close divisions in the legislature made it all but impossible to achieve agreement for significant fiscal policy reforms that would have replenished dwindling state revenue streams and eased the unfairness of the state’s tax system that continues to favor the wealthy and penalize the low and middle income households.

At the same time that budget makers were paring Medicaid health coverage, outlays to pre-school and K-12 education, and public safety, efforts to modernize and enhance state tax revenues generated little more than the retention of a regressive sales tax hike and some unproductive squabbling over additional regressive proposals like a state lottery and hikes in so-called “sin” taxes.

Serious discussion of proposals to make real and progressive structural changes to the revenue system — such as extending the sales tax to services, increasing income taxes on the wealthy and corporations, and even reviewing the real burden of local property taxes — was abandoned early in the session or avoided entirely.

In looking forward to the 2004 “short” session and the election that will follow, it is clear that more ambitious and innovative approaches will be necessary if state lawmakers are going to treat the causes as well as the symptoms of North Carolina’s persistent economic inequality.

Rob Schofield is policy director of the N.C. Justice and Community Development Center in Raleigh.

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