Checking in on GOP's 100-day agenda

When the General Assembly returns to Raleigh Nov. 7, it’ll be the 100th legislative day of the 2011-12 session – and the deadline for the “100-day agenda” put forth by GOP House and Senate leaders at the beginning of the year.

Given that it was the first time Republicans had controlled both legislative chambers in more than a century, an ambitious agenda was to be expected.

So how did they do? The agenda is in bold:

The Republicans did balance the budget without raising taxes.

Democrats have criticized the GOP budget for structural deficits and reliance on federal and local dollars to fill in some gaps. However, Democratic budget writers often used those same tactics in their own spending plans.

“Balancing a budget in the face of a deficit was a difficult and painful task, but our state’s economy will only recover if we lay the groundwork for responsible and sustainable governance,” House Speaker Thom Tillis said.

According to data from the Tax Foundation, letting the one-cent sales tax expire has put North Carolina’s state and local sales tax burden back in the middle of the pack in the Southeast. Our current average sales tax of 6.85 percent is lower than Tennessee, South Carolina and Georgia, but higher than Virginia, West Virginia and Florida.

But income taxes are another story. As of 2011, according to the Tax Foundation, North Carolina still has the highest marginal rate in the Southeast for individual income taxes, at 7.75 percent. And our corporate tax rate of 6.9 percent is still third-highest behind West Virginia and Louisiana.

Republican leaders say they’ve offered some tax relief with a provision that gives small business owners (earning less than $1 million) a tax break on their first $50,000 of income. But the impact of the break varies depending on how much the small business makes.

For a small business owner filing as an individual payer at 7.75 percent, the break amounts to $3,875. 

While few people would turn down the money, it doesn’t do much to bring down the effective tax rate. For a small business netting $500,000, the break drives down the effective individual rate from 7.75 percent to 7 percent. That’s still tied with South Carolina for the second-highest rate in the Southeast.  For a small business earning $250,000, the break lowers the effective rate to 6 percent – lower than South Carolina, but as high or higher than the rest of the Southeastern states. 

The House and Senate passed House Bill 2 early in the session. It was vetoed by Gov. Bev Perdue. The veto override failed, but a procedural move was used to resurrect the bill and keep it on standby for another override attempt at a later date.

This one is difficult to assess. GOP leaders didn’t move legislation to strengthen right-to-work laws, but there was no particular reason to since they weren’t threatened.

The House and Senate passed a slew of regulatory reform bills, including Senate Bill 22, limiting rule-making by state agencies; Senate Bill 33 Medical Malpractice Reform; Senate Bill 781 Regulatory Reform; and Senate Bill 532 ESC/Jobs Reform. The last two were vetoed by Perdue, but both vetoes were overridden.

“Our budget funded every teacher and teacher assistant position in the state, while giving local school authorities the flexibility to make decisions about efficiency,” a spokesman for Tillis said. “While tough decisions had to be made regarding education, classroom funding was a top priority.”

The state Department of Public Instruction says otherwise. According to DPI, education spending cuts resulted in layoffs of more than 500 teachers and more than 1,200 teaching assistants across the state – many because of a $400 million “reversion” (give-back) required of school districts. That cut, according to State Board of Education Chairman Bill Harrison, brings this year’s K-12 budget cuts to closer to 9.3 percent than the 5.8 percent percent GOP leaders claimed.

Senate Bill 8, No Cap on Charter Schools, was passed and signed by the governor in June.

House Bill 351, Voter ID, was passed by the House and Senate but vetoed by Perdue. An override vote in the House failed, but a parliamentary maneuver resurrected the bill. It remains on hold for another override attempt at a later date.

The House passed House Bill 8, Eminent Domain. The Senate did not take it up.

The House and Senate each passed a version of a bill for term limits, but the two chambers couldn’t agree on the details. The House also passed House Bill 139, limiting campaign contributions from some state vendors. The Senate did not take it up.

Overall, the scorecard is mixed: some hits, some strikes, some walks. But GOP leaders don’t see it that way.

“Senate Republicans have fulfilled – and exceeded – the vast majority of our goals for the first 100 legislative days,” said Senate Pro Tem Phil Berger, R-Rockingham. “As promised, we made enormous progress getting government to live within its means, passed a balanced budget, cut taxes, reformed public education and set policies that are helping the state’s job creators put people back to work.”

“While the governor has tried to derail this progress through a series of politically-motivated vetoes, we will continue to work tirelessly to make North Carolina an even better place to live, work, and raise a family,” Berger added.

Tillis also says his caucus has accomplished its agenda.

“We feel that we kept our promises to the people of North Carolina,” he said through spokesman Jordan Shaw. "On large-scale issues like tax reform and economic development, we believe we took large steps toward the overall goal, such as eliminating the sales tax increase and giving tax breaks to small businesses on the first $50,000 of income. As a specific legislative plan, the 100-days agenda represents promises made, promises kept.”

Coming into office, Berger and Tillis said they intended to focus “like a laser” on jobs and the economy. GOP leaders did not advance a jobs bill this session, but they say regulatory reform and tax cuts will help the private sector create jobs.

"They focused on jobs, all right," said House Minority Leader Joe Hackney. "Cutting thousands of them." 

Senate Minority Whip Josh Stein, D-Wake, said  Employment Security Commission numbers show 20,000 public sector jobs have been lost since July 1, when the GOP budget took effect. So far, the private sector hasn’t rebounded enough to pick up the slack. The state’s jobless rate in August was 10.4 percent – up from 9.8 percent in January, when the new legislature convened.

“The new Republican leadership has dismantled public schools and passed a budget that has resulted in 20,000 jobs lost," Stein said. “They’ve advanced a very extreme social agenda when what we should be focusing on is jobs – the unemployment rate keeps rising.”

Many of the jobs cut came from education, Hackney said. "It's very clear from school leaders that education in North Carolina is being substantially compromised, and it's just going to get worse as the year goes on."

Stein said he thinks widespread public-sector layoffs have hurt private employment more than helped it. “When somebody buys gas at a gas station,” he said, “the owner doesn’t care whether those dollars came from the state or a private employer. It’s business."

Stein said he also doesn’t believe regulatory reform will create jobs as the GOP predicts. “They’ve decimated the Department of (Environment and) Natural Resources and put the environment at risk,” he said. “In the long run, dirty air and dirty water puts jobs at risk.”