News-Record.com

Tuesday's lead editorial.

Gov. Mike Easley will leave office in a few months, but he’s taking steps now to give his successor a hand.

Last week, he ordered state agency heads to cut spending by 2 percent. He excused education, Medicaid and financial aid for college students.

Action is prudent. Tax revenues would decline with a financial downturn, and the state simply can’t spend what it doesn’t have.

Well, actually it could. So the next thing the governor should do is delay some of the expensive capital projects stuffed into the current state budget and financed through borrowing.

Those projects would cost $857 million. Although debt is paid off over many years, the sooner funds are borrowed, the sooner principal and interest payments come due. If a slow economy persists, debt-service costs will tighten available resources for operations well into the future.
Arguably, few capital projects are as urgent as public safety, health, mental health, highway maintenance and other vital services provided daily by state agencies. New buildings on state university campuses and improvements to parks, prisons, judicial facilities, ports, historic sites and the zoo represent worthwhile investments, but the governor should examine each one to determine whether money can be saved by waiting until the state’s financial future looks a little brighter.

Not one of those projects ever won the public’s blessing, anyway. Although the state constitution requires voter approval before the state can borrow money, there are limited exceptions, and the legislature took full advantage of the loopholes. That’s been a trend. The last statewide bond referendum was held in 2001. Since then, lawmakers have found ways to increase the state’s debt without asking the voters.

That approach wouldn’t fly in Greensboro or Guilford County, where elected leaders regularly put bond issues before the voters. Some are approved, some rejected. In any case, the taxpayers decide what they’re willing to borrow for.

They weren’t given the same opportunity when it came to these state projects. They should have no objections, then, if Easley slows down the borrowing. Next year, his successor can survey the financial landscape and decide whether it’s feasible to go forward.

The governor can’t nullify an act of the legislature except by veto, and Easley signed the budget in July. But when circumstances shift and it looks like revenue targets won’t be met, he can take emergency action to assure solvency. Maybe a 2 percent cut over the rest of the year will prove to be enough. Let’s hope so. If it isn’t, the governor should look next at big-ticket borrowing projects — for the sake of taxpayers and his successor.