Uncategorized

New Senate Budget: Where did the extra $252 million come from?

The new version of the Senate budget released on Monday night still falls far short adequately funding vital public investments in education, health, public safety, and clean air and water.

The Senate leadership has claimed to have restored funding for all teacher assistant positions in grades K-3 without any additional tax revenue, but where did the funds to restore this proposed cut (and several others) come from?

Most of the $252 million in “new” revenue in the 2011-12 fiscal year comes from fund transfers and a smaller tax cut. The biggest sources of additional revenue include:

  • Swapping the proposed income tax cut with a broader small business tax exemption ($55 million)
  • Reducing the set-asides for Rainy Day Fund and Repairs and Renovations ($96 million)
  • Leaving a smaller balance for the second year of the biennium ($58 million)
  • Selling state-owned assets ($15 million)
  • Suspending the corporate tax earmark for public school construction a year earlier ($72 million)

These increases in availability (and several smaller increases not listed) are partially offset by reducing the transfer from the Golden LEAF Fund by $50 million and restoring proposed cuts to tax-code spending ($18 million)

On top of the $252 million in overall appropriations, the newest version of the budget includes another $50 million in new agency-level appropriations compared to the previous Senate budget.  The additional agency appropriations are paid for through reduced contributions to the State Retirement Systems ($52 million) and lower severance expenditures ($6 million).  The reduced appropriation to the retirement systems is particularly troubling, as making an insufficient contribution will result in ballooning costs in future years.

Looking at the broader areas of the budget, the new version includes $252 million more for education, $61 million more for Health and Human Services, $7 million more for Justice and Public Safety, $12 million less for Natural and Economic Resources, and $3 million more for General Government.  Within public education, in order to restore funding for teacher assistants ($390 million), the proposal increases local discretionary cuts and cuts to educational supplies and transportation by more than $170 million.

Despite attempting to address some of the worst of the proposed budget cuts, this most recent iteration of a cuts-only approach to closing the state budget shortfall reinforces the need for a responsible, balanced approach that includes revenue to protect the state’s critical public structures.

Check Also

Some of Obama Administration’s Proposed Tax Changes Lay Groundwork for Federal, State Reform

This blog post is one in a series ...

Top Stories from NCPW

  • News
  • Commentary

A N.C. General Assembly budget mandate to fire certain North Carolina public education officials wou [...]

More than a month after a deadline to correct faulty campaign finance reports, N.C. Sen. Ralph Hise [...]

Even before he dropped the gavel on the Senate Finance Committee meeting, Sen. Jerry Tillman, a noto [...]

The $23 billion budget deal speeding through the N.C. General Assembly this week includes a platoon [...]

State budget bill is the latest and best example It’s long been a matter of public record that North [...]

By now the strategy is familiar – the strategy used by the N.C. General Assembly’s Republican chiefs [...]

The post The devil and the details appeared first on NC Policy Watch. [...]

18---percentage of people in North Carolina who receive health care coverage from Medicaid or the Ch [...]

Featured | Special Projects

NC Budget 2017
The maze of the NC Budget is complex. Follow the stories to follow the money.
Read more
 


 
NC Redistricting 2017
New map, new districts, new lawmakers. Here’s what you need to know about gerrymandering in NC.
Read more
 


 
Trump + North Carolina
In dozens of vitally important areas, policy decisions of the Trump administration are dramatically affecting and altering the lives of North Carolinians. This growing collection of stories summarizes and critiques many of the most important decisions and their impacts.
Read more