Economy may be top indicator for 2010 NC elections

RALEIGH, N.C. — North Carolina's awful economy and a new chapter of campaign and ethics investigations made governing difficult for Democrats in 2009. Those same troubles threaten to shift the state's political landscape away from Democrats if the issues stick around for most of 2010.

State Democrats contend their tough decisions on North Carolina's budget headed off worse problems, but Republicans believe that and probes of former Gov. Mike Easley and other Democrats give them an opportunity to run the majority party out of power in November.

"The cycle of corruption in this state, in which the Democrats have been largely if not wholly responsible for, and the billion-dollar tax increase in the middle of the recession — those are going to be the two cornerstones of our message in 2010," said state GOP Chairman Tom Fetzer. "I think North Carolinians are ready for a sea change."

But Republicans have had a hard time persuading voters and donors they'd do any better at the helm.

Democrats have held the Executive Mansion since 1993 and have maintained a majority in both legislative chambers for all but four years since the late 1890s. They've also knocked off three GOP incumbents in federal races since 2006, including Sen. Elizabeth Dole. Now they're aiming for GOP Sen. Richard Burr's seat next year.

State Democrats argue tough decisions on taxes and spending stopped the state economy from a free fall while protecting public education and the state's treasured top marks from the nation's bond-rating agencies.

"If we had not raised taxes this year, we would have had a disaster in this state," said new Senate Majority Leader Martin Nesbitt, D-Buncombe.

As for Republicans, he added, "They've got no real record to run on."

How North Carolina perceives Congress and President Barack Obama's handling of the economy — and how quickly any recovery reaches the state — also will play a role in how party candidates perform next year.

"They key is what the state's economy is like come next November," said David McLennan, a Peace College political science professor. "There's a lot that could happen in the meantime."

The state's economy shows no signs of a roaring recovery in 2010, which should mean less revenues for state government and likely more budget cutting for Democratic Gov. Beverly Perdue and the Legislature. Lawmakers reconvene in May to adjust the second year of a two-year state spending plan they approved last summer.

Some Democratic budget-writers are worried the current-year budget shortfall could be between $400 million and $800 million, requiring them to make deeper cuts for the budget starting July 1.

Perdue believes the shortfall will be around $400 million, and she's already ordered agencies to withhold money to handle a budget gap. That would mean cuts would be far less than those required after the $3 billion shortfall Perdue faced last year. Perdue and Democratic lawmakers passed a budget last summer that generated a $1 billion in new revenues, including higher sales and income taxes.

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