Five Fast Facts on the Legislative Budget

There are a lot of competing claims about what the Legislative Budget does and doesn’t do.  Such claims should be considered objectively in light of the best available evidence.  The Budget and Tax Center has compiled the following Five Fast Facts on the Legislative Budget based on our analysis of the latest proposal.

Fast Fact #1. The Legislative Budget spends less on public structures than the Governor’s Budget.

The real gap between the two budgets’ investment in public structures is significantly greater than is often claimed.  When comparing apples to apples, the Governor’s budget invests $580 million more than the legislative budget. As the Budget and Tax Center wrote in an earlier post,  lower funding levels will adversely impact public education from pre-K to university, the availability of critical health services, equal and fair access to courts and protections for clean air and water.

Fast Fact #2.  By relying on one-time funds through accounting changes and fund transfers, the Legislative Budget is neither fiscally responsible nor structurally sound.

The Legislative Budget puts the state on unsound fiscal footing by using hundreds of millions in non-recurring funds to support significant recurring commitments. These actions do nothing to put North Carolina’s financial house in order – in fact, they do just the opposite. It is also important to realize that the true cost of eliminating or reducing fund balances in supporting economic development, public health, and workforce development is much higher than the current cash balance of those funds. Reducing the State’s working capital in this way undermines years of progress already made towards achieving greater economic and social prosperity for all North Carolinians.

Fast Fact #3.  The Legislative Budget will result in job losses at a critical time in the state’s economic recovery.

The Legislative Budget will result in far greater job losses than could be claimed by proponents of tax cuts.  As the Budget and Tax Center wrote earlier this week, the loss of federal dollars alone from state Medicaid cuts will result in the loss of an estimated 19,000 jobs.  Extensive research from respected sources has consistently found that cutting public services to pay for tax cuts does not support economic recovery and can hinder states’ prospects for long-term economic growth.

Fast Fact #4.  The Legislative Budget does not protect classroom jobs and will undermine the education of the state’s future workforce.

Although it restores funding for teacher assistant positions on paper, the Legislative Budget includes an additional $124 million in local discretionary cuts that will undoubtedly impact the classroom. In combination with substantial direct cuts to non-instructional support, Local Education Agencies will almost certainly need to cut back on teacher and teacher assistants because of fewer resources.  Furthermore, cuts to nationally recognized early childhood education programs, programs which help to ensure that all children are ready to learn, and the reduction in need-based financial aid and supports for post-secondary education will reduce at both ends of the education pipeline the potential for North Carolina’s children to enter and leave with an education that adequately prepares them for future work.

Fast Fact #5.  Supporting public structures through the state budget generates positive outcomes for North Carolinians and the state.

Public investments make a real difference in the lives of North Carolinians.  Just this week, data released this week show that North Carolina’s investments in public education have paid dividends:  over the past ten years, North Carolina’s graduation rate has improved more than all but one other state in the nation.  Research has demonstrated again and again that investing in high-quality early childhood programs reap significant long-term benefits for children and for society at large.

It’s not just investments in education that pay off in the long run:  investing in preventive health services through Medicaid improves health outcomes and reduces costly emergency room visits; investments in programs like Sentencing Services reduces long-term costs by reducing repeat offenses; and investments in protecting land near rivers and lakes improves water quality for years to come.

One Comment

  1. Patrick Kelly

    June 11, 2011 at 12:10 pm

    Thank you for posting this. Great information it will help with my quick talking points.