Investment Gap Between Budgets of Senate and Governor 2.5 Times Larger Than Claimed

Legislative leaders have taken to claiming that the just-passed senate budget makes nearly the same level of investments as Governor Perdue’s proposed budget, suggesting that the $19.7 billion senate budget falls short of the governor’s $19.9 billion budget by “only” a $220 million.

The real gap between the two budgets is significantly more than is claimed.  Comparing apples to apples and focusing on the parts of the budget that fund public services, the governor’s budget actually invests $580 million more than the senate budget:

  • $192 million more in public education (pre-K through university)
  • $285 million more in health and human services (mostly in Medicaid and Mental Health)
  • $75 million more in justice and public safety
  • $27 million more in general government and natural and economic resources

Nearly $200 million of the difference between the advertised gap and the real gap comes from an accounting change:  instead of keeping the highway patrol in the state’s Highway Fund, the senate transfers the highway patrol to the General Fund (i.e. what most folks are talking about when they refer to the “state budget”).

Most of the rest of the gap comes from differences in allocations to so-called “statewide reserves,” a category that includes supplemental appropriations to the State Health Plan and the State Retirement Systems as well as several other funds.  The biggest difference between the two budgets is that the governor set aside roughly $140 million less for the state’s pension funds than the senate budget, based on a proposed technical policy change extending the time period to return the pensions to full funding.

The senate budget passed today may have increased public investments relative to the severely inadequate levels proposed last week, but the shortfall in public investments  relative to the governor’s budget remains significant and will have major consequences on the quality and availability of vital public services for the people of North Carolina.

3 Comments

  1. UCubed

    June 2, 2011 at 8:28 pm

    both Republican and Democratic budgets lay off thousands of state employees, correct?

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