The best-laid plans of governors.

• Author: Mooneyham, Scott
• Position: CAPITAL GOODS

In 16 years as governor, Jim Hunt never let anyone doubt what he wanted his legacy to be. During his final two terms, people parodying him always began by talking about "the little bitty chil'ren." Improving public education was hispriority, and when he left office, schools certainly were better than when he first took office in 1977. But even his fiercest fans wouldn't claim he was solely responsible for that improvement, and eight years after he departed, those schools still have serious problems, including a dropout rate above 30%. Hunt is far more likely to be remembered for strengthening North Carolina's executive branch--cajoling legislators and the public into allowing gubernatorial succession and the veto--than for an education agenda that produced mostly incremental gains.

A review of Hunt's tour of duty should serve as a lesson for the newcomer to the job. What's possible and what's not, what might get you a few sentences in the fourth-and eighth-grade history books, might not be what you anticipated. Beverly Perdue, as she makes clear in the interview that begins on page 18, considers reinvigorating and reshaping North Carolina's economy as one of the top priorities of her administration. She wants to see industries and jobs created around alternative energy and military contracting. She wants to give small businesses and entrepreneurs tax and regulatory advantages to help them grow. She wants to loosen the strings on capital that will support industrial and small-business development.

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But just as it was with Hunt's drive to remake public schools, forces beyond Perdue's control will determine whether a revamped state economy will be her legacy. She won't be able to escape the reality of the times, tough times that are going to squeeze state budgets and dry up tax coffers. She won't be able to immediately overcome the scarcity of capital and its effect on fostering business growth. Perdue surely recognizes the difficulty of her circumstances. The budget may well be out of balance by better than $1.5 billion. A financial mess--independent of the economic downturn--in the state employees health-insurance plan could require an additional $300 million. Any plans for business tax breaks, even if narrowly targeted and with broad support, will be nearly impossible anytime soon.

Finding capital to encourage development of cutting-edge, high-risk alternative-energy businesses won't be any easier. Last year...