Perdue aims for ambitious government reforms

The News & Observer reports today that Gov. Bev Perdue is thinking of performing a radical remake of state government, in the mold of Gov. O. Max Gardner. During his 1929-1933 reign, Gardner changed the face of state government forever, taking advantage of the urgency of the dire economic situation to have the state take responsibility for roads and schools, along with other reorganization of state government.

Gardner employed the urgency of economic collapse, the bankruptcy of dozens of local governments, the closings of scores of banks and his own political skills to implement a series of recommendations by the Brookings Institution, which he hired to study state government. Gardner's reforms gave us the state-paid teachers, state-paved roads and state sales tax we've known all our lives. Perdue recognizes that the anticipated $3 billion budget shortfall, the crisis in mental health care and the heavily politicized Department of Transportation align the stars for her in much the same way the crises of his era opened the reform door for Gardner.

State government cries out for reform, but it will take great political skill and grassroots support to bring about significant change. Powerful interests entrenched over 75 years will not dissolve easily. But real reforms could save the state precious tax dollars and make the state more efficient.

Highway costs have ballooned far beyond the rate of inflation, and it is obvious that some road-construction decisions are compelled by politics, not by transportation needs. Perdue's decision to take road-building decisions out of the hands of the politically appointed state Board of Transportation (though it still must be approved by legislators) is a first step in the right direction. Construction decisions must be made more wisely and professionally, and costs must be better controlled. The department has long been viewed as a political cesspool where cronies can go on to their earthly reward; the nepotism and cronyism must be cleaned up.

Although Gardner took the first step toward consolidating the university system (joining what is now UNC-CH, N.C. State and UNC-G) and Bob Scott, who died Friday, completed the consolidation of all state-supported schools under one umbrella, there still is plenty of political influence in higher education. Witness the planned new dental school at ECU at a cost of hundreds of millions of dollars over the long run and the recently announced push by UNC-G for a second state-supported pharmacy school. Alumni and other supporters push programs for the aggrandizement of their alma maters without regard to the benefits, or lack thereof, for taxpayers.

Duplicative state programs and responsibilities have survived other reform efforts. The state has the SBI, the Highway Patrol and state ALE, all involved in enforcing laws, but no consolidation has been successful. When a commission recommended folding Crime Control and Public Safety into existing departments, the proposal lost to political empire-building. No programs better illustrate the state's duplication of efforts for political reasons than Gov. Jim Hunt's Smart Start and Gov. Mike Easley's More at Four, separate programs both aimed at preparing children for school.

Despite recommendations by the Brookings study more than 75 years ago, North Carolina still elects far too many state officials. The commissioner of labor, commissioner of insurance, state treasurer, superintendent of public instruction, attorney general and secretary of state should all be appointed by the governor, just as the president appoints his Cabinet. And the state has too many departments, each protecting its own turf and running up expenses, as previous studies have shown. Reforming these anachronisms might be the most difficult reform of all. Voters who can't name a single candidate on the ballot below the governor insist that they don't want their vote taken away. Judicial elections (I doubt that 1 percent of voters can name more than two statewide judicial candidates on any given election day) should be replaced with an appointment and referendum system as has been repeatedly proposed in the past.

Reform of state taxes will have a natural urgency in an economic crisis, and this year might see some movement on this issue. Studies have frequently shown that the state retail sales tax implemented in the 1930s has lost its relevancy to a modern economy, which is far more service-driven. Most services are not taxed. But newspapers, which don't want their ads taxed, and professional organizations, which don't want their legal fees or accounting fees taxed, have prevented significant reform.

Meanwhile, the state gives away millions of dollars to lure industry to the state. These giveaways are funded by individual taxpayers and by corporations who then must compete with the subsidized industries. It's an unfair and ultimately futile exercise. The state would be wiser to reduce corporate taxes for everyone, treating newly recruited industries and established ones the same.

If Perdue succeeds against the odds to implement fundamental reforms that bring reduced costs and less efficiency, she will have earned her place in history. She has a long, hard row to hoe before she reaches that pinnacle.