NC Budget: Reading Between the Lines

>>By Marion Johnson, NC Budget & Tax Center

We’re wrapping up our final budget analysis here at the Budget and Tax Center. The unfortunate upshot is that the recent budget that lawmakers just passed is yet another wrong choice for North Carolina. For the last nine years, state spending has declined as a share of our economy. What that means is, as our state is growing and our needs are growing, actual money to address our needs is falling behind. This budget follows a trend we’ve seen from the General Assembly for the last several years. Instead of leading us to a place where we can build thriving communities and an economy that works for everyone, this budget will bring us to a point where we can’t afford anything.

Here’s one example: state funding is set to increase by $690 million between this fiscal year and the next. That sounds like a lot of money. But North Carolina actually needs over a billion dollars in additional funding to cover things like growing public school enrollment, rising Medicaid costs, and the teacher pay plan that lawmakers also passed. Even the good choices in the budget can’t succeed because they’re outweighed by the wrong choices.

Our current situation isn’t inevitable or unavoidable. Lawmakers are choosing to pass tax cuts that cost us $1 billion a year when they fully kick in. And that billion dollar loss builds on the losses of the last few years. All these tax cuts combined will lose North Carolina $3.5 billion a year in state funding. So when lawmakers say they can only afford to do so much, and they can’t prioritize everything, they’re leaving out the part where that’s a choice. They’re prioritizing tax cuts that primarily benefit the wealthy over the rest of us. They’re hurting our state, and our communities, and our families. And it’s a choice.

Here’s a quick list of some wrong choices lawmakers made in this budget:  

• Beyond additional state funding for pay increases, year-over-year net new spending for FY18 is just 1.4 percent above prior fiscal year spending.
• This budget doesn’t provide any of the estimated $293 million needed by schools to meet the state-mandated class size reduction requirements.
• We don’t have adequate funding available to eliminate existing Pre-K waitlist and to provide a Pre-K slot to all eligible 4-year-olds not on the waitlist.
• This budget fails to provide enough funding to ensure more North Carolinians have access to affordable health care services.
• No additional funding is provided to support an increase in affordable housing, which is a particular issue of concern in many areas of the state.

A budget is essentially a list of priorities. If you prioritize working families, then your budget will reflect that through investments in public education and income supports. This budget, like so many we’ve seen for the last several years, prioritizes unaffordable tax cuts above everything else. And these misplaced priorities are going to cost North Carolinians billions.