As the General Assembly limps toward the finish line of another, seemingly endless legislative session, North Carolina is at a dangerous crossroads. Worn down by months of bickering and an overpowering desire to simply get things over with, lawmakers appear to be on the verge of adopting a 2002-2003 "budget bill" that will have disastrous effects for decades to come. It is absolutely essential that North Carolinians of all political persuasions stand up and call on their elected officials to stop -- before it's too late.

What is the big problem? State government is in fiscal crisis. A decade of large and repeated tax cuts has combined with national economic recession to depress state revenues dramatically. Effectively, the state is broke and cannot pay for all the things to which it has committed itself.

How did we get in this fix? For decades, North Carolina maintained a proud tradition of progressive and fiscally responsible budget policy that made us a model for states throughout the southeast. This tradition featured a disciplined commitment to tax laws that allowed revenues to keep up with the needs of a growing state without unduly burdening the very same people most in need of services. For years, North Carolina managed the neat trick of gradually building its capacity to help those in need while keeping its taxes comparatively low and progressive. Unfortunately, in recent years, things have begun to change. Bowing to pressure from big business and other special interests that no longer recognized their stake in a more equitable system, lawmakers went on a tax cut binge throughout the late-1990's. A booming national economy and a series of quick fixes kept the state afloat for a while, but the bottom fell out during the current recession.

What is on the table? The state is constitutionally required to have a balanced budget. While the House of Representatives has taken the commendable step of defeating a proposed state lottery that would have only exacerbated the problem, legislative leaders still intend to put forth a budget bill that would make up for the shortfall by,

a)	raising the sales tax -- the tax that most affects folks at the lower end of the economic ladder and
b)	making $1 billion in immediate spending cuts --most of which come from health, human services and education.

The proposal would also direct the Governor to cut another $111 million as the year goes along.

Why is that such a bad plan? The central problem with the proposed "solution" is that it balances the budget on the backs of the very people who have been most injured by the recession and who have the least ability to pay more. According to research conducted by the N.C Budget and Tax Center, the sales tax hike will cost low-income taxpayers (folks making $8,900 per year or less) six times more, as a share of their income, than the richest 1% (who average $746,000 per year). Middle-income taxpayers (with an average income of $31,000) will pay four times more than the rich. To compound matters, the vast majority of the spending cuts will come at the expense of critical service programs that help to blunt the tremendous gap in incomes and wealth that still persist. In a modern version of medieval medicine, North Carolina leaders have prescribed a healthy dose of fiscal policy leeches to attack the disease that afflicts the state's weakest sectors.

What should be done? Governor Easley and legislative leaders must stop and reconsider the path they appear to have chosen. Rather than placing new burdens on the middle class and the poor, they must require those corporations and wealthy individuals whose incomes have soared in recent years to pay their fair share of the state tax burden. Simply closing some loopholes and reinstating the tax cuts doled out to corporations and the wealthy during the 1990's would bring hundreds of millions of dollars to state coffers without a fraction of the long-term pain that will be inflicted by the sales and lottery taxes. If leaders simply cannot muster the votes to pass the necessary structural reforms, they should -- at a minimum -- make use of all available existing funds, such as tobacco settlement dollars and corporate incentive funds before they put new, regressive taxes permanently in place.

Ultimately, our leaders must look both to the state's history -- to reexamine the courageous, far-sighted decisions of so many of their predecessors -- and to its future -- to the time well beyond the next election. They must realize that the course of politically expedient, stopgap, quick fixes will only exacerbate North Carolina's problems and mimic the failed policies that have produced such poor results for so many of our neighbors. They must advance a budget bill that helps North Carolina reclaim its progressive heritage of fiscal discipline and shared sacrifice. Now is the time for our leaders to stop and retrace their steps -- before that heritage is irretrievably lost.