N.C. legislators arrived Wednesday for a new session, sobered by the dismal national fiscal picture. But its leaders sounded a hopeful tone they would act responsibly and help the state's economy rebound.
“Other states have mortgaged their lotteries, toll roads and their futures for quick-fix cash to address short-term needs. That is not the North Carolina way,” House Speaker Joe Hackney, D-Orange, told colleagues in his acceptance speech. “It is my resolve that we emerge from this economic crisis with our fiscal integrity intact.”
House and Senate members took their oaths of office for the next two years shortly after the gavels fell at noon. They re-elected chamber leaders and approved procedural rules.
The real work soon will start in a year that will be dominated by the state budget and the economy. Lawmakers could work well into the summer to close a $3 billion gap between revenues and expenses when they assemble their own spending plan for the fiscal year starting July 1.
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Lawmakers are averse to raising sales or income taxes like they did during the 1991 and 2001 budget crises. But the recession's breadth and depth across the nation has placed even seasoned legislative leaders into uncharted waters.
“It's a daunting task, but we have a lot of experienced legislators in our (Democratic) caucus,” said Rep. Paul Luebke, D-Durham, sworn in to a 10th term Wednesday and a recent House Finance Committee co-chairman. “We certainly are looking to avoid the kinds of major taxes that we needed to raise in 2001.”
Republicans have argued the state could be better off if Democrats in charge of the legislature hadn't increased spending by nearly 10 percent in 2006 and 2007. One GOP leader said it was time to set spending priorities and make the state more competitive for jobs by reducing tax rates.
“I think we need all 50 people in (the Senate) to come up with a solution,” said Sen. Eddie Goodall, R-Union, the Republicans' joint caucus leader. “It won't be a time to go back and say, ‘I told you so.'”
Democrats returned to Raleigh still in charge of both chambers — Republicans had a net gain of one seat in the November election. Hackney was elected to a second term as speaker on a 68-51 party-line vote over House Minority Leader Paul Stam of Wake County.
Sen. Marc Basnight, D-Dare, was elected to a record ninth term as Senate leader. Senate Minority Leader Phil Berger, R-Rockingham, also was nominated for Basnight's job but interrupted the roll-call vote and asked that Basnight be elected by acclamation.
North Carolina is in relatively better shape than surrounding states when it comes to its fiscal picture. The state has nearly $800 million in its rainy day reserve fund. And a federal stimulus package could help bridge the gap between spending cuts and new taxes or fees.
Basnight and Hackney said the cash from Washington will be appreciated but budget-writers will scour the current budget to find efficiencies and eliminate duplicated services.
“We have to be careful, we have to be steady, and we have to have no errors,” Basnight said in his acceptance speech. “I would encourage you not to find your way out of this difficulty with cuts alone.”