A message from Senator Hunt

My emphasis for the 2010 session starting in May, will be to help create an environment conducive to job creation in North Carolina.  Since small business growth is the major vehicle to create jobs, I will continue to push for business friendly measures to help us recover from the current recession. Increasing taxes retards recovery but in the 2009 legislative session, the leadership increased taxes by over $900 million!  That tax increase was the result of irresponsible spending of our reserves when we had revenue surpluses in the previous six years of economic growth.   Our spending increases over the past 10 years have dramatically exceeded what we needed for our population growth plus the inflation rate.  Families and businesses prepare for a "rainy day" and so should the NC Legislature and Executive Branch.  We need fiscal responsibility and common sense legislation in North Carolina that requires saving in times of prosperity as opposed to spending every dime in sight.   Below  I have highlighted two of the fiscally responsible ideas that have I have co-sponsored over the last several years.

In order to insure that our spending priorities are in order and we control the growth of government spending and the waste of precious tax payer dollars, the two major pieces of legislation I have co-sponsored are the Taxpayer Protection Act and Zero Based Budgeting.  The TPA would limit government spending increases to the percentage population growth plus the inflation rate; and Zero Based Budgeting would require that each government department periodically justify their line item expenditures.  The combination of excessive spending, no significant rainy day funds, a continuing recession, and declining tax revenues means that significant spending restraint will be required to balance the budget for the 2010 - 2011 fiscal year. Preliminary numbers indicate about a $500,000,000 shortfall by the end of the fiscal year on June 30, 2010 and an even greater burden for the 2011 - 2012 fiscal year as federal stimulus money runs out.

The Finance Committee is currently meeting to evaluate broadening the base for the Sales Tax.  This idea has merit since we are becoming more of a "service" economy as opposed to a "goods" economy. Applying the sales tax to only "goods" has caused us to have declining sales tax revenues as our manufacturing base shrinks. This broadening of the tax base needs to be revenue neutral and the overall sales tax rate, the corporate tax rate and personal tax rates should all be significantly reduced to encourage business expansion and job growth.  History tells us that state government revenues will grow even with these tax cuts as the economy grows.  I and others are insisting that some type of spending restraint legislation such as the Tax Payer Protection Act must be attached as a part of this legislative effort to broaden the tax base. 

Even though the current leadership's spending increases have dramatically exceeded population growth and the inflation rate,  much of the spending was in non critical areas.  The leadership is still not focusing on building up our rainy day fund or state employee medical and retirement accounts, and their spending priorities have also not included the critical needs of our infrastructure such as funding for our roads, highways, bridges as well as deteriorating water supply (e.g. Falls Lake) and sewer systems in our cities and towns.  Mental health treatment funding for those unable to pay has also been underfunded.

One final thought regarding our debt load in NC.  North Carolina's Constitution requires a public referendum to increase the state's debt.  The current leadership has made an end run to avoid voter approval of debt by allowing Certificates of Participation and Tax Incremental Financing. These techniques for raising money pledge the assets of the "project" as opposed to the state, municipality or county guaranteeing the debt.  However, typically the debt service of these projects is paid by the governmental entity.  With our debt load increasing dramatically over the past six years and our debt load at the absolute maximum, we need to go back to the Constitutional requirement of voter approved debt.  If we do not, NC could be heading for the fiscal chaos we see in states like California, New York and Illinois. Of course our federal government is also a terrible example of fiscal discipline as the administration's proposed budget proposes borrowing 42 cents of every one dollar spent! 

It has been over 110 years for the current party's leadership in the NC Senate and hopefully after the 2010 elections, we will have new leadership in Raleigh. I know we can restore fiscal responsibility to the NC Legislature but we need to adopt the legislative spending restraints described above.   Remember the Preamble to the Constitution says the government is to "promote" the general welfare and "provide" for the common defense.  There is a difference between "promoting" and "providing"!  Thank you for your support in Senate District 15 over the past five years.  I would appreciate hearing from you if I can be of service to you in the General Assembly.

Please refer to the Issues and Concerns section for my view on other important topics under discussion in North Carolina. .

Neal Hunt
North Carolina Senate District 15