As the end of the Blue Ribbon Committee on the Future of Wake County draws near, I found myself nodding Monday as Chuck Neely, the Raleigh conservative and former Republican gubernatorial candidate, weighed in. “Politicians,” Neely said, “will go to the sales tax every time, because it’s the easy tax.”
“I agree with you,” I said.
“I know you do,” he said back.
Well, it was good to see Neely again. I don’t think he remembers it, but we had a shared interest in the bicentennial of the U.S. Constitution back in ’87. Indeed, on my visit to the BRC, I renewed old acquaintances with a number of conservatives, including businessman Bob Luddy, who loves his charter schools, and real-estate mogul Steve Stroud, who said it scared him when he saw that I’d mentioned him favorably last week in recalling how the RBC Center got started. He was kidding–I think.
Point is, almost every conversation I had with a BRC member was with a conservative, because that’s who’s on the BRC. Of the 65 members, there are maybe three liberals–I’m thinking Frank Daniels Jr., former owner of The News & Observer, and the other two must not have been there Monday–versus at least 50 bidness types whose views range from the rigid right all the way to the mushy middle.
My evidence for this, other than knowing a lot of them, is that “increasing charter schools” ranked 10th out of 51 on a list of changes the members recommended to their staff’s draft report. Whatever you think of charter schools, they can’t possibly substitute for the public school system’s huge building backlog–unless you first break up the public school system.
But for 18 members out of the 25 who turned in their homework (CEOs procrastinate, too?), charter schools were “high priority.”
The BRC was appointed seven months ago, you’ll recall, to take the heat off the Wake County commissioners, who finally saw that a dozen years of foot-dragging over Wake’s school and other capital needs (not to say arm-dragging) had done real damage, and years of serious spending–and serious tax hikes–would be required to make up for it.
The foot-dragging, of course, resulted from Republican stinginess. And a 5-2 Republican majority still controls the Wake commissioners. So in that sense, the GOP made its own sad bed and should lay upon it come election time this November.
Still, give credit to Tony Gurley, the current commissioners’ chair, and last year’s chair Joe Bryan, for breaking with the rigid past. That Wake County, thanks to the BRC, can now look forward to a mushy future may henceforth serve as the centerpiece of their re-election campaigns.
Did I say mushy? I should perhaps have said “pretty fuzzy,” which is how John Hood, president of the conservative John Locke Foundation, put it when he stood up to assess the BRC’s work. Hood would prefer, spending-wise, to hang onto the old rigidity. But failing that, he noted accurately, the BRC’s spending plans far exceed its recommended funding grasp.
Boiling it down, the BRC predicts that Wake, over the next 25 years, will need about $18 billion to $19 billion more for schools, transportation and other big-ticket items than it will collect given the county’s current tax policies. But try as they might, BRC members could only bring their conservative selves to recommend about $12 billion to $13 billion in additional revenues, or $14 billion to $15 billion if you add a 1 percent real estate transfer tax that a remnant of the membership tentatively approved late Monday by a vote of just 15-14.
And as Neely noted, a lot of the proposed revenue would come from an added 1 percent county sales tax that would first require the General Assembly’s OK, and the voters’ approval after that.
Sales taxes are regressive–that is, they fall most heavily on lower-income people, who must spend all or most of their earnings on taxable things. The rich, of course, by saving and vacationing in faraway places, do not.
That’s why they’re an easy tax, in Neely’s term, because the money’s extracted a little at a time–and pretty much invisibly–from the politically powerless.
That’s as opposed to income taxes or property taxes, either of which would be better correlated with people’s wealth and ability to pay, and are thus, Neely said, “hard” taxes that “impose discipline” on the government.
What’s that mean? It means people with money notice them, and a lot of them scream–and start contributing to your opponents–if they see you jacking them up.
The BRC, at this point, is calling for a hefty property tax hike (and revaluations every four years, not eight, to keep pace with inflation). But it’s not calling for a sufficient one.
It rejected the idea of a small (.25 percent) income-tax surcharge.
It also rejected impact fees on developers.
No surprise there, given all the developers who are on it.
So unless something changes between now and its final report in July, the BRC will leave the job of funding Wake’s future needs unfinished. Because as Capitol Broadcasting CEO Jim Goodmon said so plaintively, “We need something else, but we can’t figure out what the something else is.”
Does that mean it’s a failure? Not at all. When 2006 began, who among us would have said–without being hooted out of town, that is–that Wake County’s got a $19 billion hole to fill, and had better start filling it this November with what must now be seen as a rather modest $970 million school bond issue?
That’s what the Republicans are saying. Imagine, for a moment, what a progressive BRC would say.
To contact Citizen: rjgeary@mac.com.
