Change you can't believe in.

• Author: Mooneyham, Scott
• Position: CAPITALGOODS - Patrick McCrory and Beverly Perdue

Charlotte Mayor Pat McCrory is a danger to the middle class. Just ask Lt. Gov. Beverly Perdue. As for Perdue, she's part of the power elite, one of five or six people who control everything in the state. McCrory says so. To hear Democrat Perdue and Republican McCrory speak, you would think the world will come to an end should the other move into the governor's mansion in January. And, of course, each candidate's own election will certainly transform the state and its economy as we know it.

"Jobs, jobs, jobs," McCrory begins one television ad. There's an original line. Like most every Republican who has run for any kind of office the last 30 years, he also talks a lot about cutting taxes. He's eyeing reductions in the state corporate and personal income taxes. Perdue, on the other hand, has been trumpeting proposals to expand government health-insurance programs for the working class. Neither would be cheap. Either could create pressure to raise taxes. On business recruitment and job creation, the two major-party candidates croon a similar tune. When questioned, both lament North Carolina's growing reliance on cash and tax inducements to lure businesses. Both vow to explore regional agreements to limit incentives. So we seem to have in McCrory and Perdue change we can believe in, albeit different kinds of change. Don't bet on it. Election of either likely will portend few changes in the course of economic or tax policy, for a variety of reasons.

McCrory argues that reducing the state income tax would improve the state's business climate. But whoever becomes the next governor will face some stark budgetary realities. The economic slowdown likely will mean an end to five years of budget surpluses, and the new governor probably will be confronted with a shortfall within a few months of taking office. The reserves sit at more than $800 million, about 4% of the $21 billion budget. That's a substantial cushion if tax collections slow. The current budget is based on fairly conservative revenue growth, so the next governor shouldn't inherit the mess that Mike Easley had to deal with when the bottom fell out on tax collections in 2001. But a faltering economy would strain state finances next year and into 2010. Historically, these are the kind of times when legislators and governors--Democrat and Republican--have raised taxes, not lowered them.

Even as the economy recovers, cutting broad-based income taxes never will be easy in North Carolina. Easley...