By Brenna Burch
Public Policy Analyst, Budget & Tax Center
- The North Carolina House of Representatives has proposed a $19.3 billion General Fund budget for fiscal year 2011-2012 and a $19.5 billion budget for fiscal year 2012-2013. The House budget, if enacted, would decrease total General Fund spending by $669 million, or 3.4 percent, over estimated actual FY10-11 spending.
- A $230 million reserve for an unspecified corporate tax cut in the House budget deepened the FY11-12 budget gap from $2.4 billion to $2.6 billion. The House closes the gap with $1.9 billion in spending cuts; $456 million in transfers from and diversions to non-General Fund accounts; and an anticipated $403 million General Fund net credit balance from current-year savings and reversions.
- The House did not provide any details on their revenue plan in the budget. Revenue-based adjustments to availability include the $230 million reserve for pending tax legislation and a $57 million recurring loss from the expiration of the estate tax, partially offset by $30 million in other tax receipts, for a net recurring loss of $257 million.The House made 40 percent of its $1.9 billion in FY11-12 spending cuts in the public education budget ($759 million), 24 percent in health and human services ($466 million), and 23 percent in the UNC system ($447 million).
- Several praiseworthy fiscal policy suggestions in the House budget, including statutory deposits to strategic savings reserve accounts and full funding for state pension plans, are diminished by the fact that these changes are financed entirely by recurring cuts to core government programs and services rather than by raising fair and responsible revenue.