Claims Dept: RGA on the 'status quo'

DavidIngram — Wed, 17 Sep 2008 17:55:50 -0400

The Republican Governors Association's first ad against Beverly Perdue accuses her of wanting to continue the "status quo" in Raleigh.

What the ad says:The ad shows two actors playing Raleigh insiders. They walk into the state Capitol to speak with an actress playing Perdue.

First insider: "We have to get Beverly Perdue to maintain that status quo."

Second insider: "How hard can that be?"

One of them holds a red "status quo" button — a take-off on an ad campaign for office supplies.

First insider: "Status quo Beverly Perdue!"

Second insider: "Bev, we have a new tax-increase plan!"

First insider: "Together, we've passed over $6 billion in new taxes."

Second insider: "The largest-growing tax burden in the country."

First insider: "Push the status quo button, Bev!"

The actress pushes the button and nods to other requests.

First insider: "Bev, time to raise the gas tax."

Second insider: "Just like we've done for almost 20 years."

First insider: "And no offshore drilling."

The actress pushes the button again.

First insider: "Bev, more pork-barrel spending."

Second insider: "Let's take it out of the slush fund you passed."

First insider: "Push the button, Bev!"

Narrator: "Tell Beverly Perdue North Carolina can't afford the status quo."

The background: The ad raises three issues — taxes, gasoline and government spending.

TAXES: The Republican Governors Association says the "$6 billion in new taxes" is the amount raised by new state taxes imposed from 2001-06. Almost half of that came from two temporary taxes that lawmakers and Gov. Mike Easley imposed because of a 2001 budget crisis: an extra half-penny sales tax and a new upper-income tax bracket. The rest came from more than 60 other tax changes.

Easley and lawmakers have also cut taxes since 2001. In the 1990s, when Perdue was a legislator and a lead budget writer, lawmakers and Gov. Jim Hunt cut or eliminated some taxes.

The RGA says the claim about the "largest-growing tax burden in the country" is based on an April 12, 2007, article from The Tax Foundation in Washington, D.C. The article says "North Carolina's tax burden rank has seen the largest increase of any state since 2000," jumping from the 36th highest state-local tax burden in 2000 to the 19th highest.

The article, though, is based on outmoded methodology. According to the foundation's revised data, North Carolina's tax burden rank was 20th — not 36th — in 2000. It has since fluctuated between 17th and 22nd. In 2008, it is again 20th.

Contacted Tuesday, a foundation spokesman apologized for the confusion and an economist there said the newer methodology is more accurate.

Perdue represented the New Bern area in the legislature from 1987 until 2001. She has since served as lieutenant governor, a position where she presides over the N.C. Senate. As lieutenant governor, Perdue can vote only in the case of a tie. So her role in tax changes since 2001 has been only procedural.

GASOLINE: North Carolina started taxing gasoline in 1921 at a penny a gallon. Lawmakers raised the tax over the decades, and in 1989 Democratic lawmakers and Republican Gov. Jim Martin pushed through an increase from about 16 cents a gallon to about 21 cents a gallon. Under the 1989 law, the tax fluctuates with the price of gas. It now stands at about 30 cents a gallon, the maximum under a 2006 law.

Perdue was a co-sponsor of the 1989 law. She has been largely silent in recent years while legislators debated a cap on the gas tax. She told The Charlotte Observer this year that she would support local-option taxes for transportation and consider other new revenue sources, such as a tax on miles driven.

On drilling off the North Carolina coast, Perdue says she wants to hear from scientists before taking a position. As recently as June, she had said she was "100 percent opposed" to the idea.

SPENDING: The terms "pork-barrel spending" and "slush fund" are generally associated with spending that meets any of several criteria: it does not follow a regular approval process, it is not transparent or it is not based on measurable criteria or need.

From 1995 through 2000, Perdue was a co-chair of the Senate Appropriations Committee. Though any spending must be approved by the full legislature and the governor, the position meant Perdue was involved in closed-door budget negotiations. There were at least two instances during this time when lawmakers, including Perdue, were accused of creating or using a "slush fund."

Before the 1996 fall election, legislative leaders and Hunt divided up $21 million from a "repairs and renovations" fund without specific approval from the full legislature. The money went to local projects around the state. The next year, lawmakers added another $39 million to the fund — a decision Perdue defended while promising more oversight.

"There will be a complete review," Perdue told the Greensboro News & Record. "There isn't a slush fund."

(The fund continues to this day. A legislative committee is charged with reviewing its spending.)

In March 1997, The Charlotte Observer reported on a $9 million annual transportation fund that lawmakers — not transportation experts were in charge of dividing up. Over a 26-month period, Perdue ranked second in allocations from the fund for local projects like road-paving. (The fund continues to this day.)

Is it accurate? The claims about taxes are inaccurate in two ways. Perdue has presided over the N.C. Senate since 2001, but she has rarely voted and has lacked the power to "pass" any tax changes. The support for the claim that North Carolina's tax burden is the country's "largest-growing" is outmoded.

The claim that there would be "no offshore drilling" under Perdue is a prediction that may or may not turn out to be accurate, as are the claims that Perdue would raise the gas tax and increase "pork-barrel spending."

— David Ingram

slush funds

Claims Dept: RGA on the 'status quo'