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Governor
says 'lottery and loopholes' can pay for new programs
Appearing
relaxed and confident enough to crack a few jokes, Gov. Mike
Easley delivered his first State of the State speech to a
joint session of the House and Senate on Monday, telling
legislators that the state's worst fiscal crisis in a decade
is no excuse for slowing down efforts to improve public
education. He challenged lawmakers to find the money somewhere
to fund existing school improvement programs and to pay for
his initiatives to provide new services to at-risk 4-year-olds
and to reduce class size in kindergarten through third grade.
Read
the complete text of the governor's speech.
Officials back away from
quick changes in tax code
"In the past, our progress and economic prosperity have
run in cycles," Easley said. "We have invested in
education in good times, but failed to complete the job when
the economy slows. Our state has seen this cycle repeated
decade after decade. We make great progress, only to see it
erode. Friends, we've come too far this time. We have too much
invested and too much left to do."
The governor said North Carolina can afford to continue the
expensive work of improving the public schools by adopting a
state lottery and by amending the tax laws to eliminate
provisions that would cost businesses hundreds of millions of
dollars a year in additional taxes. Raleigh newspaper
columnist Rob Christiansen quipped that the governor's plan
was based on "lottery and loopholes."
Although elected officials have talked about a state lottery
for many years, Monday was the first time a governor has stood
before the public and asked for one. But while Easley said he
thinks a lottery is the best way for the state to raise
additional money to support education, he said he's open to
alternatives.
"Now I am not saying a lottery for education is the only
solution, it’s just one solution," the governor said.
"If anyone has a better
idea . . . if anyone has another way to find the $400 million
to $500
million for education, I am open to it. But you can’t just say
no we’re against a lottery
– finish the sentence – tell me what you’re for, because
next year 100,000 five-year olds will show up at the
schoolhouse door and they deserve more than an overcrowded
classroom and an overworked teacher."
Easley also proposed closing "revenue loopholes that defy
good business practice and fly in the face of fundamental
fairness." He said he has asked retired State Treasurer
Harlan Boyles to chair a commission to study "tax
incentives that cannot be justified in our current economic
condition."
That alarmed some business leaders, but NCCBI
President Phil Kirk said the association was closely
monitoring the situation. "What the governor calls
'revenue loopholes' are carefully crafted provisions in the
tax code that have been scrutinized and adopted by the
legislature, mostly to encourage economic growth so businesses
can hire more people and pay more in taxes.
"We should see this talk about closing loopholes for what
it really is -- raising taxes on businesses at an uncertain
and difficult time in the economy," Kirk added.
"Several of these tax provisions benefit the
manufacturing sector. North Carolina lost a record number of
manufacturing jobs last year, so we believe the legislature
should be very careful about doing anything that would make
that situation worse."
Legislators said they liked Easley's speech, mainly because he
said he was willing to work with the General Assembly to
accomplish common goals. House Speaker Jim Black, in one
newspaper interview, said, "I appreciate the fact that he
didn't come in demanding it. He didn't come in demanding, but
challenging: `Here's a way to do it. If you don't like that,
do it another way. But do it.'"
Some Republicans said a lottery is not the way to solve the
state's budget problems. House Minority Leader Leo Daughtry
pointed out even if the General Assembly passed a lottery
today, revenues wouldn't show up for about three years.
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See the complete text of
the governor's speech
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