BTC BRIEF: Legislative Budget Would Cost North Carolina 30,000 Jobs, Billions in Economic Output

By Allan Freyer
Policy Analyst, Budget & Tax Center
June 2011


  • In FY2011-2012, the initial impacts of the proposed budget cuts will cost the state 32,022 jobs, $1.3 billion in lost wages for workers, and $2.8 billion in industry output.  Once the budget cuts are fully realized in FY2012-13, the cumulative impact will rise to $1.8 billion in lost labor income and $3.9 billion in reduced industry output, destroying a total of 44,576 jobs.
  • Foregone Federal matching dollars for Child Health Insurance (CHIP) and Medicaid due to short-sighted budget cuts will cost North Carolina a cumulative 13,355 jobs, $613.4 million in labor income, and $1.4 billion in industry output by FY2012-13.
  • The budget’s proposed tax cut package yields significantly weaker economic benefits than hoped, creating only 14,793 jobs by FY2012-13, $574.1 million in new labor income, and $1.73 billion in new industry output—clearly insufficient to counterbalance the negative impacts of the budget cuts.
  • Taken together, the net effects of the tax cut package and budget cuts demonstrate that the proposed budget in its entirety will significantly damage the North Carolina economy.  By FY 2012-13, this budget will cost the state a cumulative 29,782 jobs, $1.2 billion in lower wages, and $2.3 billion in lost industry output.


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