Selling helicopters and addressing budget shortfalls

By Scott Mooneyham | May 05, 2014

RALEIGH -- In 2001, as North Carolina faced a budget shortfall in the aftermath of the Internet bubble being burst, the political rhetoric prompted an idea from a mischievous capital reporter.

Hearing legislative Democrats compare the state's financial situation to the Great Depression (a comparison a bit more apt eight years later), I proposed that reporters of the Capital Press Corps come up with a list of steps state leaders would really take if the financial crunch were as bad as the rhetoric suggested.

We never followed through on the idea, but I already had in mind the item that would lead the list: Sell the governor's helicopter.

Imagine my surprise last week when Gov. Pat McCrory, not even under the financial strains of 2001, went on Twitter to announce that his administration is selling the helicopter on eBay.

He decided that the 12-passenger Sikorsky S-76, costing $265,000 in 2013 to maintain and operate, is too expensive.

It could fetch $3 million.

That may be a lot to you and me, but in a $20 billion state operating budget, those figures are pretty small. Perhaps that is why McCrory's predecessors kept the helicopter.

Still, as my list idea suggested way back when, there is some value in seeing politicians take even small steps, in a financial sense, when they involve giving up expenses associated with their own prestige.

When the item in question has limited value, it makes even more sense.

Selling the helicopter is a smart move by McCrory.

He needed to make some smart moves to improve his public standing and build up some political capital.

That is especially the case now because, even if it is no longer 2001, the state again finds itself in a financial dilemma.

Budget analysts last week estimated that state government now faces a revenue shortfall of $445 million. That budget gap will have to be closed before the end of the state's fiscal year on June 30.

The good news: McCrory administration officials are being straight with the public when they say the administration and state legislators have been prudent by establishing enough reserves to cover that kind of shortfall in the current fiscal year.

The bad news: The explanation that the shortfall could be the result of some one-time income shifts associated with state and federal tax changes may be a bit glib.

So too may be the projections that tax collections, as a result, will only fall $191 million below projections in the next fiscal year.

McCrory and legislative leaders cannot escape the inescapable, that the tax overhaul which they approved has put a bigger dent in tax collections than they thought.

Selling a state helicopter is a nice, symbolic move.

The tougher road ahead will involve a sober assessment of what is really occurring with tax collections, even if it fails to jibe with earlier, rosy scenarios and promises of pay raises to state workers.

 

Comments (1)
Posted by: Charles Zimmerman | May 06, 2014 07:33

             The chickens of "Voo Doo economics" are coming home to roost.

              "rayguns" established a policy whereby too few taxes were collected forcing a scale-back of programs.

              Goodbye public schools.

 

               C.Z.



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