Some say the United States is still mired in the deepest recession since the Great Depression. Others point to economic figures generated out of Washington and New York as evidence the recession has past, even if that “recovery” hasn’t made it to Main Street USA. Still others voice the concern the economy may dip into a second recession before the so-called recovery has a chance to pick up speed.
When the economy is weak, local governments, just like any other entity, generally struggle. That is why a recent audit of Mount Airy’s financial footing is all the more remarkable. The audit showed despite the difficult economic times, the city managed to increase its reserve fund without increasing taxes or fees, at the same time maintaining the same level of service city residents have come to expect.
Sounds like city officials have taken a good, hard, look at the lean times and found ways to cut unnecessary spending, spread out the needed work among fewer employees (although no one has lost a job — some vacancies simply are going unfilled), and discovered other ways to reduce spending.
North Carolina, facing a supposed $3 billion budget deficit, might do well to learn a lesson or two from Mount Airy.
To be sure, the state budget is much more complex than a small city spending plan, with federal mandates and local government expectations to consider, not to mention simply the sheer number of employees and projects the state government has going on at any given time.
Still, there is much that can be done on the state level. First, honesty might be a good policy. Last year state leaders, including Gov. Bev Perdue, used scare tactics about education funding losses and other hurtful cuts on the horizon to get legislators to go along with her budget measures. At the time she hammered opponents by pointing to a $3 billion deficit which never materialized, and we have to wonder if this is simply another version of the Boy Who Cried Wolf.
Second, it would be nice to see the state government run on today’s dollars, not temporary fixes or on tax dollars which might be generated sometime down the road. The state artificially balanced its budget this year using temporary federal stimulus money. Lawmakers knew that money was temporary, yet they lumped it into the state’s general fund and now are crying about a new deficit without the money.
North Carolina also instituted a supposed temporary penny increase in the state sales tax. Again, law makers knew this was to be a short-term plan, yet have done little to adjust the state’s spending habits to account for the expiration of this tax. We suspect, come July 1, that extra penny will still be tacked onto every sale in the state.
We suggest lawmakers look long and hard at the actual, honest-to-goodness revenue the state has coming, not temporary fixes and short-term fees, and then construct a budget using those dollars.
Other states have managed to do it, even increasing “rainy day” and reserve funds in the process, just has Mount Airy managed.
A new wave of politicians from the GOP have seized control of the General Assembly, promising change in state government. The budget process is the best place for them to start.