Prosperity Watch Issue 27, No. 1: Education and health care make up largest share of state budget, most at risk from tax cuts

As lawmakers continue to debate big tax cuts and spending reductions in the FY2013-15 North Carolina state budget, it’s worth taking a step back and reminding ourselves what public investments our tax revenues support—and what investments would be most at risk if revenues were to be dramatically reduced. At the most basic level, tax revenues support investments intended to benefit the common good of state residents and which the private market cannot or will not provide—investments like educating our children, training our workforce, building our roads, providing public safety, protecting our drinking water from pollution, and making sure all of our state’s residents have access to basic primary healthcare.

Unfortunately, recently proposed tax cuts place these investments in serious jeopardy by reducing the amount of revenue available to meet the common needs of our rapidly growing state.  As seen in the following figure, the two areas which make up the overwhelming majority of our state budget is Elementary and Postsecondary Education (55 percent) and Health and Human Services (22 percent). Given that these investments account for more than three-fourths of the total budget, it would be hard to protect these areas from additional cuts beyond what they have already experienced in recent years.


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