Introduction

Hard choices and daunting fiscal problems confronted the General Assembly and Governor during the first three years of the 21st century. Unlike the national government, North Carolina must function within the constitutional requirement that state revenues and expenditures be balanced during each fiscal year, including years of declining economic activity and higher demands on governmental services. State statutes declare that the General Assembly’s appropriations are “maximum, conditional and proportionate.” Appropriations are maximum in that an agency may not spend more than is appropriated, conditional in that they are dependent on actual revenue collections and proportionate in that the total amount agencies can spend is proportional to actual revenue collections. Even though the General Assembly adopts the state’s spending plan, the Governor has the constitutional responsibility to make spending reductions to ensure that at the end of each fiscal year the state has a balanced budget.

As a consequence of the balanced budget requirement, there is a “boom and bust” character to state spending cycles. When the economy is strong as it was during much of the 1990s, the state budget enjoys surplus which makes it possible to cut taxes and increase spending. During periods of economic downturns and declining revenues, such as in 1990-1991 and 2000-2003, state government is forced to raise taxes and reduce spending. Unlike most businesses that conclude it is worse to send a customer away unhappy because of a merchandise outage than having unsold stock left on the shelves or a private household that concludes it is better to have money in the checking account at the end of the month than a zero balance, many politicians act as if it is a great disaster to have tax revenues unspent. Republicans tend to view revenue surplus as an opportunity for a tax cut. Democrats tend to view it as an opportunity for more social spending. For voters, the disaster is having the state make commitments that are not realized, which is increasingly becoming the case in North Carolina as the economic slow down persists.

The vast majority of the members of the General Assembly attempting to cope with the state’s fiscal problems represent “safe” electoral districts, districts so heavily tilted in favor of one particular political party that candidates from the opposition party have virtually no chance of winning. This is possible because politicians in most states, including North Carolina, participate in the drawing of their own legislative districts. Using computers and software designed especially for the task, Democrats and Republicans conspire together to create the maximum number of safe districts for incumbents from their respective parties by drawing districts that are heavily weighted with either Democratic or Republican voters. The problem with safe seats is that it diminishes the influence of citizens in the election process since they provide no meaningful choices. In this sense, safe districts have become a threat to the integrity of our democratic system. The members of the North Carolina General Assembly (as well as legislators in virtually all of the states) have turned on its head the age-old principle that the electorate chooses its leaders to one where elected representatives now choose their voters.

In the following pages, these two political phenomena -- the budget crisis and the proliferation of safe seats in the General Assembly -- are explored. The two phenomena are connected. Legislators elected from safe districts have few incentives to appeal to anyone other than partisan supporters. With Democrats appealing to mostly Democrats and Republicans to mostly Republicans, positions on issues become rigid and political rhetoric extreme. Rational and forward looking government policies typically require cooperation, pragmatic solutions to public problems and public officials capable of disagreeing in an agreeable manner, qualities that seem to be on the wane in the U.S. Congress and the North Carolina General Assembly.

The North Carolina State Capitol Building in Raleigh	UNC-CH ChancellorJames Moeser, Governor Michael Easley, and PBS show host, Charlie Rose From Hugh Morton's NC , UNC Press ©2003
The Budget Crisis Downsizing the State Budget Tax and Spend Policies: Alternative Futures for North Carolina The Negative Consequences of Redistricting
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The Budget Crisis

During the boom years of the 1990s, the obsession of Republicans in the North Carolina House was to reduce taxes. The goal of Governor James Hunt and Senate Democrats was to boost spending for schools, the environment and human services. As a consequence of this “tug of war,” the General Assembly enacted sizable permanent tax cuts between 1995 and 1998, which by FY 2001 reduced state revenues by approximately $1.5 billion (Table 1).

At the same time the General Assembly approved several substantial investments in state services. These service-related investments included increasing teacher pay to the national average, paying for water quality improvement projects, funding the Smart Start Program for young children and issuing voter approved bonds for the universities and community colleges. During these years, North Carolina was able to afford tax cuts and new spending because of a windfall of capital gains and corporate profits from a strong economy and strong growth projections for future revenues. Some of the tax cuts, the elimination of the tax on food and the increase in the income tax personal exemption rate, made the state’s tax system more equitable by providing tax relief to low income families. Other cuts mainly benefited upper-income earners and made the tax code less equitable.

Also contributing to North Carolina’s fiscal crisis were several one-time expenses. The North Carolina Supreme Court ruled in May 1998 that the state had to repay approximately $800 million to state government retirees whose pensions were illegally taxed. In December 1998, the Supreme Court ordered the state to reimburse citizens for an unconstitutional tax on their stocks (intangibles tax), a repayment that cost the state $596 million. In September 1999, Hurricane Floyd devastated large areas of eastern North Carolina and eventually cost the state another $800 million for clean-up efforts. The above “unplanned” expenditures cost North Carolina $2.2 billion.

During the first three years of the new millennium, surpluses in governmental budgets across the United States changed into deficits. At the federal level, the Clinton surpluses were transformed into a $600 billion flood of red ink by the beginning of 2003, a turn around attributable in roughly equal parts to a slowing economy, an increase in public spending and a series of tax cuts. At the state level, the grim reality was similar. By 2003-2004, state legislatures across the nation confronted an anticipated combined budgetary shortfall of approximately $90 billion. These legislative bodies had hitched their spending projections to the boom economy of the 1990s and with the slow down of business, the rise in unemployment and collapse of the stock market, they suddenly were saddled with spending obligations that could not be sustained.

To make matters worse, as state revenues began to decline, health care costs exploded; the cost of visiting a doctor, staying in a hospital and purchasing drugs climbed at a rate not seen in over a decade. In 2002 alone, Medicaid costs in state budgets increased by 13.2 percent, compared to a 1.3 percent increase in overall state government spending. Even though North Carolina’s state government pays only 33 percent of total Medicaid costs (providing health care to the uninsured; long-term care for the elderly, blind and disabled; and subsidizing the rising cost of prescription drugs), it has become a budget busting monster Figures 1 and 2). As the first big wave of baby boomers approach retirement age, these galloping health-care costs show no sign of retreating. Instead, they loom on the horizon as an ominous threat to the capacity of state government to fund other important public services such as K-12 education, community colleges and public universities.

Due to the above changes, the Governor and members of the General Assembly focused much of their time and effort during the 2001, 2002 and 2003 legislative sessions on closing mammoth gaps in the state budget. The challenge for the state’s political leadership was finding money to cope with the health needs of an expanding cohort of citizens over 65 years of age as well as higher health-care costs for state employees and Medicaid recipients, a substantial increase in the number of students enrolled in the state’s educational institutions, rising numbers of under-employed and unemployed citizens due to the economic slowdown, and the higher cost of the state’s debt payments.

Downsizing the State Budget

Due to a sharp decline in revenues, Governor Mike Easley introduced during January 2001 emergency measures to keep the $14.5 billion general fund in balance. He cut approximately 3.8 percent from agency appropriations. As deficits continued to grow, members of the General Assembly cut more than $700 million out of the state budget during the 2001 legislative session. The legislature also raised taxes to generate additional revenues. The new tax burden fell disportionately on people at the lowest and highest ends of the income scale. An increase in the regressive sales tax had greater impact on citizens with low incomes and the increase in the income tax impacted only the wealthiest citizens (Figure 3).

The General Assembly raised additional revenues by closing several tax loopholes and levying a new liquor tax. At the same time, legislators enacted several tax relief measures: an increase in the child tax credit from $60 to $100, marriage penalty relief that increased the standard deduction for married couples filing jointly to twice that of single taxpayers, and a sales tax holiday for back to school items. Even though the state was in dire economic straits, the General Assembly refused to increase the cigarette tax, one of the lowest in the United States at five cents a pack, or establish a state lottery, making North Carolina the only state on the east coast without one. Despite more than $700 million in tax cuts and $445 million in revenue increases, the FY 2002 budget was eventually balanced by projecting a four percent growth rate in revenues. This proved to be overly optimistic. Due to the weakening economy, the 2001-2002 General fund brought in less revenue than the year before, an extremely rare occurrence in North Carolina because of the state’s constant year-to-year growth in population.

Almost immediately after the passage of the FY 2002 budget, the events of September 11, 2001, further exacerbated the nation’s economic decline and introduced new obstacles to a swift economic recovery. In October 2001, the Governor cut approximately $356 million from agency budgets, took money from the state’s reserved funds, borrowed money dedicated to hurricane relief, and held back $209 million promised to local governments as a reimbursement for previously repealed local taxes. These actions generated about $1.3 billion. On May 3, 2002, the state budget director placed a “freeze” on all state spending except for payroll, utilities, required state aid and debt service. This extraordinary action was taken to close a $300 million budget gap that still existed in the FY 2002 budget. While providing Medicaid, public schools, reserves and debt service with a degree of protection, the state cut projected spending in FY 2002 by more than six percent. This was accomplished despite a significant increase in Medicaid spending; growing public school, community college, and university enrollments; and an explosion in unemployment claims. Overall, the state government spent only 1.55 percent more in FY 2002 ($14.8 billion) than it had done in FY 2001 ($14.5 billion), a difficult and disciplined feat during a period when citizen needs were escalating due to the economic downturn. In fact, if the state had kept pace with inflation and population growth, the FY 2002 budget would have increased by 4.4 percent in order to just keep service levels flat.

When the General Assembly convened for the 2003 legislative session, it confronted more grim news: a potential budgetary shortfall of $2 billion. Approximately $850 million of the shortfall were related to decisions made by the General Assembly and the Governor in previous years: $460 million of promised tax cuts scheduled to take effect on July 1, 2003 (the temporary one-half cent sales tax increase and the one-half percent increase on upper-end income tax rates); emergency withdrawals from trust funds that needed to be replaced; program cuts from the previous budget year that had to be restored; and escalating costs to refinance the state’s debt. Other parts of the projected budget shortfall were due to proposed new state activities: enrollment growth for education ($200 million), Medicaid growth ($300 million), an increase in the cost of providing healthcare for state employees ($100 million) and opening three new prisons ($60 million). Other potential spending initiatives included pay raises for state employees ($50 million for each one percent increase), restoring to the state employees’ retirement fund $150 million which was borrowed by the Governor to cover a budget shortfall, repairs and renovations to state property ($150 million), reducing the size of second grade classes ($25 million) and expanding the More at Four preschool program ($25 million). State revenues were projected to grow 3.5 percent during FY 2004 and 5.5 percent during FY 2005, a rate of growth that Governor Easley thought to be overly optimistic.

At the end of the 2003 legislative session, state law makers were able to agree on a two-year budget only hours before a possible shutdown of the government and only after the shortage of revenues forced many legislators to make painful compromises. Many Republican legislators argued that allowing the temporary one-half cent sales tax and one-half percent increase on upper-end income tax rates to continue was in effect a tax increase. Other law makers believed the nearly $1 billion in spending cuts were too deep in selected areas. The “tax and spend” compromise supported by a majority of legislators in both the House and Senate was to continue the 2001 tax increases but not raise other taxes, even though there was a serious effort to increase tobacco and alcohol taxes in the Senate. It also was agreed that current state services would be kept flat, except for significant cuts in Medicaid and summer school courses at community colleges. The General Assembly approved the Governor’s plans to reduce class sizes in the second grade and enroll 10,000 four-year-olds in pre-kindergarten classes.

To raise additional revenues, tuition costs were increased for students enrolled in the state’s public universities by five percent and for students in the community college system by 3.2 percent. The General Assembly authorized the state to borrow money to fund the construction of three prisons and pay for the employment of 571 additional second grade teachers as well as additional pre-kindergarten teachers. But the General Assembly needed a last minute, one-time reprieve from the federal government to balance the 2003-2004 budget. The highly publicized $350 billion federal tax cut that was promoted by President George Bush and approved by the United States Congress included a one-time $20 billion state aid package. North Carolina’s share of the aid package was $510 million. This one-time windfall arrived in Raleigh just at the moment the General Assembly was struggling to find ways to close a $400 million gap in the 2003-2004 budget.

The General Assembly passed and the Governor signed a $14.8 billion state budget for 2003-2004 and a projected $15.5 billion budget for 2004-2005. However, aspects of the approved biennial budget are disturbing. The future revenue projections adopted by the General Assembly assume an uptick in the state’s economy. If those estimates are lowered, the state will be forced to make deeper spending cuts or raise taxes to balance the FY 2004 and FY 2005 budgets. The state used “borrowed” money to fund the Governor’s new education programs. A larger share of the cost of attending the state’s community colleges and universities were passed on to students in the form of hikes in tuition and fees. Perhaps, the most disturbing aspect of the biennial budget was using the one-time federal windfall to balance the 2003-2004 budget, monies that will not be available in future years.

It should be emphasized that North Carolina is not the only state employing optimistic revenue projections and accounting “gimmicks” to close budget gaps. In recent years, state governments have satisfied the constitutional requirement of a balanced budget by moving end-of-year paydays into another budget year, delaying tax refunds, speeding up tax collections, borrowing money to pay for operating costs and selling state property to cover deficit spending. These kinds of budgetary actions do not resolve state funding problems; they simply postpone them, either to the next legislative session or the next generation. State legislators all across the country, as well as the members of the United States Congress, hope the economy will revive and become once again a revenue producing dynamo. If the boom economy of the 1990s returns, the cherished programs of legislative leaders can be funded without an increase in taxes. But if the boom years of the 1990s do not return, state revenues will continue to fall short of public needs. Recognizing this possibility, Governor Easley acknowledged about a week before the General Assembly passed the 2003-2005 biennial budget that it was $420 million out-of-balance because state revenues in a slow economy were certain to fall short of the General Assembly’s projections. Therefore, more hard choices await the Governor and members of the General Assembly in FY 2004. A consistent policy of less governmental spending will reverse North Carolina’s progressive tradition of supporting education and social needs and eventually align North Carolina in a public policy sense with the states of the deep South. If a choice is made to continue with a progressive public agenda and support education and social service needs at more than a minimal level, additional state revenues will have to be generated, either by raising taxes or reforming the state’s antiquated tax structure. Study commissions appointed by both the Governor and General Assembly have consistently documented the fact that the state’s tax structure needs to be reformed. Much of the current tax structure was established during the 1930s and is based on a manufacturing economy, an economy that is fading away with every plant closing.

Tax and Spend Policies: Alternative Futures for North Carolina

An important debate over North Carolina’s future is taking place within the General Assembly and state government. A conservative coalition of GOP legislators, Republican Party officials and public advocacy groups, such as the John Locke Foundation, argue that the state’s poor economic climate is related to extravagant and unwise tax and spend policies of former Democratic-controlled state legislatures and Democratic Governors. These anti-tax proponents believe that high taxes are ultimately self-defeating for the state because they force entrepreneurs, investors and even the general citizenry to seek more favorable tax climates outside of North Carolina. As a general rule, members of the conservative coalition believe anything that fuels growth in government should be viewed with suspicion and the best way to control public sector growth is to deny government access to new taxes. Conservatives claim that the General Assembly needs to look no further than its short-sighted decisions in the areas of Medicaid, corporate subsidies and escalating public debt to find the cause of the state’s budget deficits. They note that even after the highly publicized budget cuts over the last three fiscal years, North Carolina’s budget has increased by 80 percent over a ten year span. If the budget had been allowed to grow in concert with rising prices and population increases between FY 1993 and FY 2003, it would have expanded by 46 percent rather than 80 percent. Even if key programs such as education and Medicaid had been allowed to keep pace with enrollments growing faster than the overall population, the FY 2003 budget would still be $2.2 billion smaller than the one adopted by the General Assembly, a budget that would not have required any tax increases or drastic cuts to balance.

Other members of the General Assembly, many of whom are Democrats, and a broad array of advocacy groups defend the state’s progressive tradition of spending on education and social needs. They claim the state’s economic woes are due mainly to events over which the state government had little control: the slow down in the national economy, collapse of the stock market, federal trade policies that encourage the movement of manufacturing jobs to Mexico and Asia and the War in Iraq which resulted in more military personnel being deployed from North Carolina than any other state. The North Carolina Budget and Tax Center, an independent, nonprofit advocacy group located in Raleigh, noted that the state’s so-called “runaway spending” over the last decade is more perception than reality. Conceding that total state spending grew significantly, the general fund nearly doubled between FY 1991 and FY 2003, that fact alone is insufficient to prove there has been extravagant spending and dramatic growth in state government.

In order to assess whether the General Assembly and former Governors had engaged in extravagant spending, and after controlling for inflation and population growth, the North Carolina Budget and Tax Center reported that the allegation the state government had been on a decade-long “spending spree” was illusionary. The major findings reported were:

• After adjusting for inflation, North Carolina’s general fund appropriations, excluding Medicaid, was $80 less per capita in 2002-2003 than it was in 1990-1991 (Figure 4);

• General fund appropriations declined $184 per capita since 1999-2000, even after including Medicaid in the calculation;

• Total state general fund appropriations, including Medicaid, dropped as a percentage of total personal income from 7.05 percent to 6.17 percent since 1990-1991;

• Per capita general fund appropriations increased since 1990-1991, but that growth can be completely accounted for in state Medicaid appropriations and is not indicative of a state government “spending spree” (figure 5);

• While state lawmakers deliberately acted to cover more health services for low-income residents through Medicaid than required by the federal government, including Medicaid spending in calculations on state government growth can present an inaccurate picture of a so-called “spending spree” throughout the state budget; and

• During 2002-2003, approximately 25 percent of the state’s general fund budget was devoted to spending on health services – 15 percent to Medicaid and another 10 percent to things like mental health, employee & retiree health insurance, Health Choice, etc. If one adjusts for the fact that 25 percent of the state budget is linked to health care inflation, which consistently outpaces general inflation, the real growth in the state budget is smaller than it appears.

Even though the General Assembly did invest substantial amounts of new money during the 1990s in public education and health care for the poor, it also made deep, permanent tax cuts and spending reductions. However, Medicaid spending is a special problem for state governments everywhere. Unless the federal government assumes full responsibility for funding Medicaid, which is not likely, this program will continue to drive state spending higher for the foreseeable future. Most of the precipitous growth will be due to the rising cost of caring for seniors and persons with disabilities combined with the soaring cost of prescription drugs, the fastest growing component of Medicaid expenditures.

There are steps that the General Assembly can take to minimize the gap between revenues and spending needs. But the General Assembly must have the political will to do so. There is a growing disconnect between the state’s tax structure and North Carolina’s economy, a disconnect that is growing larger with every textile and furniture job exported off-shore. Individual income tax rates established during the 1930s, when local governments faced bankruptcy and the state assumed primary responsibility for funding public schools and highways, exempted all but the most wealthy citizens. Business taxes accounted for 60 percent of General Fund revenues in 1934-1935, sales taxes 31 percent, and individual income taxes 6 percent. Over time, primarily due to bracket creep, the relative shares of business and consumer taxes changed dramatically; citizens who originally were exempt from paying income taxes eventually became the major source of state revenues. Corporate income taxes, which once provided the majority of the state’s tax revenues, now account for less than six percent of state revenues, while individual income taxes generate about 50 percent of general fund revenues and sales taxes about 28 percent (Figure6). A series of study commissions, some appointed by the state legislature and others by the Governor, have repeatedly documented the antiquated nature of North Carolina’s tax code, but to date neither the General Assembly nor Governor has wanted to open up this “political Pandora’s box” and create a taxation system that generates adequate revenues to meet state and local needs and distributes the burden fairly to all citizens.

Reforming the state’s tax structure involves a broad array of potential legislative actions. These include the taxing of services in the same manner as the taxing of goods, closing tax loopholes that advantage privileged groups, reinstating the corporate tax rate to its pre-1995 levels, raising the cigarette tax to near the national median, as well as other options. Even if all of the above tax revisions were enacted (an unlikely prospect given all the various interests that would be mobilized to prevent such an outcome), these combined initiatives would still be insufficient to close projected revenue gaps in the state budget. Virtually all of the new taxes, fees and fund diversions approved by the General Assembly for FY 2005, will be consumed by projected growth in three areas: health care, debt service and higher education (Figure 7).

In the absence of a dramatic turn around in the economy, the General Assembly must increase a major revenue source, the individual income tax rate or the state’s sales tax. The most equitable and most significant in terms of revenues generated would be increasing the income tax rate; this action also would distribute the tax burden more fairly because of its progressive nature. However, voters across the nation appear to be in no mood to rally behind politicians who raise taxes or even talk about raising taxes. The recall of Governor Davis in California provides a clear message to public officials everywhere that finding additional revenues for state and local governments is going to be a dangerous business. After three years of budget reversions, reductions in services and increasing unmet public needs, North Carolina is at a crossroad. The state can decide to maintain its infrastructure and progressive traditions or, through the process of neglect, fallback to the status of some of the poorest southern states.

The Negative Consequences of Redistricting

The redrawing of U.S. House and state legislative districts after each federal census is supposed to preserve the one-person-one-vote standard by requiring legislators to take population shifts into account on a regular ten year basis. Redistricting has been used on many occasions for public-regarding ends. During the 1960s, the courts ruled that electoral districts must include approximately the same number of voters, thus breaking the pattern of legislators from rural areas ignoring the movement of voters into urban areas. By requiring state legislative and congressional districts to include about the same number of citizens, the rural control of American legislatures was broken. Two decades later, the courts and U.S. Justice Department began to vigorously enforce the Voting Rights Act which mandated the principle that legislative districts must provide opportunities for African American candidates to compete for public office. Following the 1990 census, the U.S. Department of Justice supported by Republican Party organizations and civil rights groups secured the creation of new minority-dominated electoral districts, especially in the South. As a result of concentrating African American voters into relatively few electoral districts, two African Americans from North Carolina were elected to the U.S. House of Representatives in 1992, the first time that outcome had been achieved in the 20th century. In the same election, 25 African Americans were elected to the North Carolina General Assembly, also an all time high.

The creation of majority minority districts was endorsed by the Republican Party because it benefited the GOP in two important ways. Since African-Americans typically vote heavily for Democratic candidates, moving many of these voters into majority minority districts greatly improved the chances of Republican candidates winning in neighboring districts. Second, by increasing the size of the Republican base in districts already held by Republicans, it made it more difficult for Democratic challengers to successfully unseat incumbents. Although not the outcome sought by the federal courts and U.S. Justice Department, the establishment of majority minority districts contributed to locking many voters into districts where meaningful ballot choices are seldom presented. In these typically Democratic districts there may be an occasional competitive primary contest but virtually never a competitive race in the general election.

Safe electoral districts are promoted elsewhere by bunching reliable Republican or Democratic voters into specific districts. Politicians have become skilled in using sophisticated computer software to identify voting patterns at the precinct level, the methodological cornerstone for reliable safe districts. When predictable friendly voting patterns are coupled with incumbency, the single best indicator of electoral success at all levels of the ballot, the obstacles confronting challengers are overwhelming. With relatively few exceptions, incumbents raise and spend more money on political campaigns, enjoy better name recognition among likely voters, and receive more “free” mass media exposure than challengers. When incumbency and majority party status reinforce one another, the individual voter typically has the following choices: ratify the incumbent or “heir apparent” of the party controlling the district, waste a vote on a candidate who is sure to lose, or stay home on election day. For example, in the 2002 U.S. House races, only four of the 386 incumbents seeking reelection lost to non-incumbent challengers (four incumbents lost to other incumbents in races where they were thrown into the same district as a result of redistricting), an overall 98 percent reelection rate.

On the surface, elections in North Carolina are fiercely competitive. Each major party controls a seat in the U.S. Senate and the U.S. House delegation is evenly split, seven Republicans and six Democrats. In the 2000 election, voters selected a Democrat for Governor while electing an overwhelmingly Republican State judiciary. The North Carolina House includes 60 Republicans and 60 Democrats; in the North Carolina Senate, the Democrats enjoy a narrow 28 to 22 advantage. Democrats control 55 county commissions, Republicans 45. But at the level of the individual citizen, the reality is that few voters have “real” ballot choices in non-statewide races. A case in point is North Carolina’s 2002 U.S. House races.

As a result of the 2000 census, North Carolina increased its U.S. House delegation to 13 (Figure 8). Brad Miller, a Democrat, was elected to the new seat in 2002. In the other 12 districts, two Republican incumbents (3rd and 5th Congressional Districts) won without any Democratic opposition. In only one race, Robin Hayes’ victory in the eighth district, was the winning margin ten percent or less. The highest vote count received by a losing major party candidate for the U.S. House was 44 percent, again in the eighth district. In ten of the 13 districts, the winner won in a landslide, a margin of 20 percent or more (Table 2).

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At the state legislature level, winning seats in 2002 had about as much to do with winning court cases as with gaining votes at the ballot box. As specified in the state constitution, the Democratic majority in the General Assembly redrew House and Senate electoral districts following the 2000 census. The district maps designed by the Democratic controlled legislature were immediately challenged in the courts by Republicans. In May 2002, the Republican controlled North Carolina Supreme Court rejected the Democratic legislative district plan on the grounds that the state constitution prohibited districts crossing county lines unless required to do so to comply with such mandates as the 14th amendment to the U.S. Constitution or the Voting Rights Act. The state Supreme Court also ruled that the legislature should draw only single-member districts, thus requiring the elimination of eight multi-member Senate districts and 17 multi-member House districts.

Due to the timing of the state Supreme Court’s decision, the May 2002 primary election had to be postponed. Working quickly, the General Assembly approved new district maps which were submitted to Superior Court Judge Knox V. Jenkins for review and approval. Judge Jenkins rejected the newly drawn General Assembly maps and ordered into effect House and Senate district maps that he designed. Democrats in the General Assembly immediately challenged Jenkins’ decision, and the state Supreme Court agreed to hear an appeal of the judge’s order, but only after the 2002 elections based on Jenkins’ district maps were held. This judgment had huge consequences for the 2002 election. Republicans gained seven Senate seats and won a 61-59 majority in the State House. Eventually, this thin GOP majority in the House turned into a 60-60 dead heat when Representative Michael Decker, a veteran Republican, left the GOP and joined the Democratic caucus at the beginning of the 2003 legislative session. Following a period of “behind the scenes” political maneuvering, James Black, the previous Democratic Speaker, and Republican Richard Morgan forged a governing coalition across party lines that allowed the House to organize itself with co-Speakers. All 60 Democrats voted for the Black-Morgan co-Speakership arrangement, while Republicans divided almost equally on the matter, 29 in favor and 31 opposed.

The district maps that produced the current General Assembly probably will be in effect for only the 2002 election. However, the impact has been significant. Veteran Democratic leaders in the General Assembly were gerrymandered into Republican leaning districts and several of these office holders either decided not to seek re-election or lost their seats to Republican challengers. Nearly one-third of the members of the 2003 General Assembly are first-term legislators, not a typical outcome. As of this writing, Democrats in the General Assembly have requested the state Supreme Court to reinstate the 2002 district plans enacted by the legislature. The judgment of the court will be announced before the 2004 election, and there is a strong possibility that the members of the next General Assembly will be elected from yet another set of legislative districts.

Even though there has been a considerable amount of study and partisan infighting over the redistricting issue, the fact remains that an overwhelming majority of the 170 seats in the General Assembly are stacked in favor of one or the other major political party. In the North Carolina Senate, 22 districts favor Democrats, and 22 others favor Republicans. There are only six swing seats in the Senate, electoral districts where candidates from either major party have a reasonable chance of being elected. In the North Carolina House, 52 districts favor Democratic candidates and 49 favor Republicans. Only 19 of the 120 members of the House are elected from competitive or swing districts. In the 2002 election, Democrats retained control of the North Carolina Senate (28 to 22) by winning all 22 safe Democratic seats, four of the six swing districts and two Republican leaning districts. Senator David Hoyle, a six-term Democrat, was returned to office by voters in a strong Republican district and a freshman Democrat, Joe Sam Queen, won for the first time in a leaning Republican district. On the House side, GOP candidates won 48 of 49 strong and leaning Republican districts, 12 of the 19 swing districts and one seat in a leaning Democratic district for a 61-59 victory on election night. From the viewpoint of politicians and incumbents, the 2002 election outcomes meant the electoral system was working perfectly. To the voters, it meant that most of them were denied any meaningful voice in determining who represents them in the state legislature and U.S. House of Representative. Given the above, it is not surprising that two out of every three eligible voters decided to do something other than vote on election day. Only 35.6 percent of eligible voters cast a ballot in 2002, one of the lowest proportions in more than a decade (Figure 9).

The large number of safe districts in Congress and the state legislature has consequences, and most of them are negative for the general citizenry. Since most voters are bunched into non-competitive districts, elected officials have little incentive to appeal to middle-of-the-road or moderate constituencies. In a district that regularly provides the incumbent with 60 percent or more of the vote, the elected official is likely to articulate and vote the appropriate “party line” and feel no need to even pay lip service to the other 30 to 40 percent of the electorate who happen to reside in the district. The rising number of hyper-Republicans and hyper-Democrats who are sent to Washington and the various state capitols are frequently more interested in making political “points” than solving practical problems. As a result, citizens are beginning to lose faith in the system that produces such office holders.

One way to reverse the gridlock that frequently afflicts the General Assembly and U.S. Congress is to expand the number of swing districts. If at least a significant number of legislative candidates had to appeal to a broad cross-section of the electorate rather than just Republicans or Democrats, a winning strategy would more likely emphasize the virtues of moderation, problem-solving skills, cooperation and respect for a variety of opinions. Bitter partisan rhetoric, now common place in the halls of Congress and the General Assembly, would moderate because legislative leaders would have to fashion messages acceptable to ideologically and ethnically diverse coalitions of supporters in order to win or retain legislative majorities.

The 2003 co-Speaker arrangement in the North Carolina House provides evidence that cooperation and compromise between Democrats and Republicans in the General Assembly are possible. Despite predictions that the state’s budget woes and even split between Democrats and Republicans in the House would produce chaos, the co-Speakers created a governing coalition that passed a state budget early in the session, identified issues on which Democrats and Republicans could agree, and enacted the appropriate legislation. On more contentious issues -- the death penalty and state lottery -- the co-Speakers put those issues aside for future consideration. Of course, it would be naïve to believe that incumbent Democrat and Republican legislators will voluntarily expand the number of swing seats in the General Assembly and U.S. House delegation. However, a judicial remedy might be possible. A charge that could be leveled at the General Assembly is that partisan and politically-driven redistricting robs citizens of their rights to full representation. A failure by the General Assembly to respond in a rational and thoughtful manner to the state’s budget crisis might just provide the motivation for citizens to advance such a claim.