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JACK FLEER:

Now we talked a lot about the role of the governor as an executive leader in budgeting and you made what to me is a very important comment and I wanted you to elaborate on it. You said, if I understood you correctly, that you thought the budget was the most important tool that a governor has and could you talk a little bit about why you believe that and how that is the case?

JAMES E. HOLSHOUSER, JR.:

Well even though the veto has seriously changed the equation in terms of the governor's participation in the legislative process itself. He has got a lot more ability to directly influence the legislature now than he did when I was governor. Because even though you might veto something and have it overridden, the legislature has to get exposed and experience serious scrutiny of things that they have done and they don't like that. So it puts the governor's lobbyist in a position to really negotiate on legislation. And Clinton does a lot of that as well with the Congress. So I think that has changed. But in the overall scheme of things, given the limitations on the veto where the budget is concerned, to the extent that the legislature will usually give you things that you want that don't cost money, your ability to get money from the legislature for things that you want to do that do cost money is probably the key to your success. If you are fortunate you are going to have legislative leaders that agree with your idea on those things or at least aren't willing to fight you on them. If you don't understand the budget process I think you just start off behind the curve in terms of getting from point A to point B. Because if you know what you want and you can't wake up the legislature and they haven't given it to you, then you have really done bad. Most Democrats governors had the advantage of being their party leader in the office of governor and legislatures tended to rubber stamp that. I knew it was going to be especially challenging for me as a Republican, particularly being the first Republican, because they wouldn't do that automatically like they had done with a Democrat. And if Skipper Bowles had gotten elected they would have gone along with him. So we had to be, just had to be extra sharp on how we went about it and I think we were.

JACK FLEER:

How much discretionary budgetary resources did you have as a governor in the sense that decisions really could be made without them?

JAMES E. HOLSHOUSER, JR.:

You have the authority that is in the Executive Budget Act as the director of the budget to move money around. There are some limitations on that though. But it is much more flexibility than you have in some states. I had one of my staff members go to work with Pete DuPont, Governor of Delaware after we finished our term. She said that in his office he couldn't buy a typewriter without the approval of the legislature, I mean signed off approval. So if something broke he went out and paid for it out of his pocket because he couldn't wait for the next legislature to come around to do it. North Carolina's executive budget act is the key to your ability to get along because you always have things that happen unexpectedly. CP&L or Duke raises their power rates and your electric bill goes up. While you have got the contingency and emergency fund to help with some unexpected things particularly natural disasters, it is really pretty small. I think it was only a million and a half-dollars during my time. It should be larger now but I don't really know. You have got a lot more authority than people realize as director of budget. I guess that is one of the reasons that got us irritated when I was in the legislature, the fact that this money kept moving around from time to time. At that time you also had a significant amount of discretion in Coastal Plaines Commission money and Appalachian Regional Commission money that was coming from the federal government. Most of that has dried up if not totally pretty much, as has the whole federal grants operation. But for instance when Old Maine burned down at Pembroke that had been the original Indian building that started the campus. The Indians had a really emotional attachment to it. I knew before they had had a controversy before I was elected. When it burned that made it worse. I called Bill Friday the next morning and I said I know you have got some people on the campus and probably in your administration that would just as soon scrape off the ruins and put a new building there and that makes a lot of sense. But there is too much history and emotions about this building. I'll get you some Coastal Plains Commission money for some planning and examination of how to rebuild it as opposed to, because the walls were still standing there, how have to leave the walls there and build in around it as opposed to putting up a new building. Of course Bill being the pragmatic guy he was, he said I will take your plan up.

JACK FLEER:

Was a nice offer wasn't it?

JAMES E. HOLSHOUSER, JR.:

It was. And that again his folks, Dr. English the Chancellor down there, President at the time, no Chancellor at the time, and some of the people at Chapel Hill had been wanting to raise that building already and had a bunch of the Indians upset about it. I had told them that I would see to it the Old Maine did better. So when that happened it sort of became an emergency item and Coastal Plains money was probably not designed to plan for a Pembroke building. But you had discretion about it.

JACK FLEER:

It was useful as governor, I mean you do have that kind of discretion

JAMES E. HOLSHOUSER, JR.:

That is right.