In the frothy first days of North Carolina’s “conservative revolution,” reporter David Crabtree had a bone to pick with Josh Stein. Did Republicans really defund the North Carolina Cancer Hospital because they wanted to cut taxes for the wealthy, he asked. Personally, I beleve this was the most morally defensible reason they had for cutting cancer funding. To defund cancer research for the sake of a tax cut is cynical and wrong. To cut that funding for its own sake would be shocking and obscene.
So their reasoning has bounced back and forth as they cut North Carolina government to bare-minimum size. Some budget reductions, such as their elimination of North Carolina’s nationally renowned Teaching Fellows program, came from pique at a Democratic governor whose success frustrated their political ambition for decades. Other cuts were mindless but no less loathsome–see their elimination of job training for vulnerable divorced homemakers. Whatever the case, budget austerity is now locked in due to the constraints GOP tax writers have imposed upon state revenue.
Reagan administration budget director David Stockman called this strategy “starving the beast.” It may be hard for your or me to imagine government as a great shaggy animal with four heads and five horns, but to movement conservatives, Government is an Other. Political institutions with the power of the state are seen as a capital-t Thing scheming to take away the god-given freedoms of virtuous white Americans. To deprive government of revenue is to deprive the beast of its lifeblood, opening the way for a renaissance of liberty in conservative America.
Let’s review what has happened to North Carolina tax revenue. With then-governor Pat McCrory’s assent, Republicans passed a multi-years system of tax reductions that ended progressivity and brought the corporate tax rate to the lowest in the nation. They cut taxes for the rich repeatedly in the years following their landmark tax-shift law, and now with the dreadful-but-not-worth-vetoing 2021 budget, they have eliminated corporate taxes outright. As a result, the state has lost billions upon billions of dollars in revenue, almost all of it having gone to the wealthy and corporations based in other states or other countries.
Constitutionally, this draining of revenue has required a severe shrinkage of state government. Like other states’, North Carolina’s constitution mandates a balanced budget. With less revenue to invest, the state has invested less. And the cost to social welfare has been immense. Test scores are falling, the achievement gap is widening, suicide rates are going up, and infant mortality statistics increasingly resemble Mississippi’s. The New North Carolina has fully embraced the mentality of a Third World Country–or of a typical Southern U.S. state.
What is most distressing about this regressive business is that it will be very hard to undo. Once put into place, tax reforms–even unpopular ones–become difficult to reverse. See, for example, U.S. Senate Democrats’ inability even to reverse Donald Trump’s 2.6% cut in the top personal income tax rate. It’s hard to imagine a future North Carolina Democratic majority reinstalling a corporate income tax now that’s gone. If you need an education, or maternity care, or emergency intervention when your loved may die of suicide, I’m sorry, North Carolina’s government is not coming to help.
As an in-mover, I watched that all happen with horror.