2019 Budget Fails to Effectively Address N.C.’s Existing and Emerging Needs

North Carolina can afford to invest in our communities as they grow and change if policymakers reject tax cuts.
 
By Luis Toledo, BTC Policy Analyst 
and Alexandra Sirota, Budget & Tax Center Director
August 2018
 
North Carolina lawmakers approved a 2019 fiscal year state budget that falls short of helping all North Carolinians live healthy, prosperous lives. The final state budget, passed by the NC General Assembly after overturning Governor Cooper’s veto, continues to underinvest in areas of great public need and neglects to account for upcoming federal budget cuts. Instead, the new $23.9 billion budget that lawmakers enacted maintains the same rigid commitment to reducing public investments in the face of growing and changing needs. 
 
The final budget that lawmakers enacted continues to limit a collective commitment to North Carolina, increasing spending by $881.7 million over 2018. To put that figure in perspective, this means that the final budget is just 1 percent above pre-Recession levels, despite the state’s population growth over that same period of 11 percent.
 
Due to changes made in the way the General Assembly presents its budget, there is no longer an expectation that the state will maintain the services that were offered in the prior year. The failure to account for maintaining current service levels in the public presentation of budget figures has allowed legislators to suggest full funding for programs and services, when they are really just keeping up with enrollment growth and the growth in costs associated with delivering public services. As the state’s Fiscal Research Division has noted, the primary drivers of spending growth year-over-year are K-12 education, higher education, Medicaid and prisons, which combined account for 79 percent of the state’s overall budget and which require a greater year-over-year investment than has been met in the past two years.  
 
The $881.7 million increase in state spending from last fiscal year falls short of the $946.8 million that would be required to maintain current services for the growing population, keep up with the cost of delivering services, and fulfill the obligations of policy decisions like increasing teacher pay. This means that, while they may be meeting their obligations to fund enrollment growth, lawmakers are reducing spending in other areas to do so.
 
Holding spending down arbitrarily means state policymakers are not providing what is needed to deliver a high-quality education to each child, promote better public health, effectively protect our air and water, and meet the needs of our growing population. North Carolina can afford to invest in our communities as they grow and change. To do so, policymakers would have to reject tax cuts that began in 2013 and which, by January 2019, will reduce annual revenue by $3.5 billion each year. 
 
 
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