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Can a champion of progressive budget priorities make an impact inside the governor's office?

If there's one person in North Carolina who can steer the state's taxing and spending toward fairness and sustainability, it's Dan Gerlach.

That's still a mighty big if, but progressives with an eye on state government are mostly thrilled about the Dec. 10 appointment of Gerlach, a leading liberal economist, to the post of senior policy advisor for fiscal affairs for Gov. Mike Easley. The North Carolina Budget and Tax Center in Raleigh, a nonprofit group Gerlach has headed since its creation in 1995, has served as a consistently influential lobby for people on the low end of the economic spectrum. Gerlach has led the way in pushing for earned income tax credits, less regressive taxes and cuts in corporate welfare.

His center, for example, has issued reports showing that the 1996 Lee Act--which was intended to funnel tax credits to impoverished counties--has in fact resulted in a disproportionate share going to affluent ones. And this year, the General Assembly enacted new disclosure requirements for companies recieving tax credits, requirements the center has long advocated.

So Gerlach's new post constitutes "a great opportunity for low-income and working people to have a real voice in the governor's office," says Bill Rowe, executive director of the North Carolina Justice and Community Development Center, which oversees the Budget and Tax Center. "He has a big heart and a tremendous commitment to working people."

Still, the appointment is a bittersweet development for some of Gerlach's biggest fans. "My initial reactions are very positive," says Dana Cope, executive director of the State Employees Association of North Carolina. "My only bit of caution is that I would hope that Dan hasn't sold out. I hope we don't lose his valuable voice for the working families in North Carolina."

Progressives would indeed be losing something valuable if Gerlach's good works are neutralized when he goes to work for Easley in January. It's a rare public-interest advocate who is willing to wade into the mire of state budget outlays. Rarer still is one who is capable of positing workable solutions to the sort of nettlesome problems that made this year's legislative session the longest in history. The General Assembly came into session in the midst of a boom economy, and the governor had big plans. But then the economy tanked, state revenues dwindled, and suddenly state government was in need of creative and informed budget planning to keep essential services afloat.

That's what Gerlach is best at, and he's convinced that now, more than ever, his expertise and values can affect state policies. "I want to be in there in the middle of tough times," he says. "I believe reform is possible from the inside. I think the governor knows my work pretty well--and he hired me anyway."

Gerlach, 34, has put in a decade of work on tough budget challenges. Before coming to Raleigh, he worked three years in the New York State Assembly on state and local fiscal issues. Through his work at the Budget and Tax Center, he's established a reputation as a highly knowledgeable and pragmatic analyst, and a vigilant watchdog against measures that shift tax burdens from corporations to the poor.

Speaking for the governor's office, State Budget Officer David McCoy heaps praise on Gerlach: "Given his very unique experience, I perceive him to be a very rich asset, and so do the people in the communities we work in, the business and advocacy communities. In particular, his work with the citizen-based groups gives us a perspective that a lot of folks don't have."

In addition, McCoy says, while some budget analysts get bogged down in the accounting, Gerlach has a "macro vision" that respects the nuts-and-bolts of policy-making. When Gerlach talks, McCoy says, Easley will listen.

Still, once policies are hashed out, the administration will expect Gerlach to back them, or at the least, chose not to go public with his personal disagreements. "The thing that makes Easley such a competent manager is that he openly requests input from his staff," McCoy says. "What he would expect from Dan is being candid and forthright, but when debate is finished, when we decide what to do, then we all stand behind it. We are all entitled to our personal opinions, but we work through this as a team and implement as a team."

Last week, as Gerlach was packing up the office from which he's long cajoled and prodded the state government, he said that people shouldn't be surprised he's willing to work with this administration. For the most part, he agrees with Easley's handling of the budget. "I'm going into this with open eyes about areas where I'll be saying I'd like to do things differently, but there's so much more I agree upon than I disagree with," he says. "On the tax side, the economic development side, the education side, on these three key areas of government I think I agree with him."

One fiscal area where Gerlach and Easley don't see eye to eye is the lottery. Easley's been a big backer, saying that gaming revenues could provide more education spending. Gerlach's been an opponent, arguing that lotteries sap the assets of people who are already poor.

The governor and his new advisor will have to agree to disagree. "People ask me, does this hire mean that the governor's changed his mind about the lottery? He has not," Gerlach says. "He's very enthusiastic about the state lottery." Gerlach will remain privately critical, but on the public side, he's resigned his position on the board of Citizens United Against the Lottery. In future discussions about implementing a lottery, "I'm just going to give the governor the best advice I can," Gerlach says. "The governor knows the downfalls of it, but I will try to help him try to figure how much money is actually involved in it."

Gerlach says he's writing what will probably be his last newspaper column for a while, and in it, he addresses the concerns of "everybody who views this as 'going over to the dark side.' You know, I'm a progressive. I don't believe that government is the dark side."

"I've always thought I might go back in" to government work, he says. It may not be the dark side, but Gerlach acknowledges that it is a distinctly different side. "For me it keeps my perspective. On the outside, it's very important work, but sometimes you don't understand what are the battles that are being fought inside government. How bad could it have been? And there's some value to knowing that."

Gerlach's colleagues argue that concerns that his fundamental mission is changing are unwarranted. "I don't think Dan's message will be any different than what he was delivering before," says Rowe, who credits Gerlach with forcing--and enabling--the legislature to consider the impact of budget choices on poverty. "The message will be the same and the messenger will be the same."

Gerlach will now have the governor's ear for that message, but the Easley administration will continue to hear from the dozens of business lobbyists who push for corporate tax breaks and other measures Gerlach opposes.

"I have mixed emotions about it, because I think that progressive advocates are losing an important outside voice," says Chris Fitzsimon, executive director of the Common Sense Foundation in Raleigh, of Gerlach's new job. "I hope this means that we'll have a dramatically more progressive budget and tax structure, but that will not be easy"--even for a master wonk like Gerlach. "Dan as well as anybody knows what he's up against." EndBlock

  • Can a progressive budget analyst make a difference in the governor's office?

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