Falling Behind in NC, NC Budget and Tax Center

The untold story of Governor McCrory’s budget proposal

Governor McCrory’s budget proposal, while representing a small step toward overall reinvestment, fails to fully support crucial public investments and North Carolina’s most vulnerable residents, according to a new report from the Budget & Tax Center. The Center also released a companion factsheet that highlights the report’s analysis of five important issues that remain part of the untold story on the proposal. The five points are summarized below.

  1.  In historical context, his proposal reflects a diminished baseline budget when compared to pre-recession levels of spending and would make FY2013-14 the year that North Carolina spends the lowest in state General Fund dollars as a share of the economy in 42 years.
  2. While representing a small step toward overall reinvestment, his proposal falls far short of what is needed to maintain existing levels of public services in 5 of the 6 major budget areas.
  3. The Department of Commerce—whose core mission is to encourage economic development—would be converted into a public-private partnership under his proposal.  This sweeping policy change has been proven ineffective in other states.
  4. A major uncertainty is whether the reserves in his proposal would be sufficient to cope with the first and potentially second rounds of sequestration cuts as well as the federal budget passed by the US House of Representatives—known as the “Ryan Plan.”
  5. The governor’s proposal significantly underinvests in expanding economic opportunities for all residents. For instance, his proposal shifts away from economic development investments targeted at low-income, distressed populations and communities and toward encouraging general economic growth through industrial recruitment. And, there is no additional investment in need-based financial aid for UNC system students.

The Center’s analysis shows that even as the economy recovers and revenue collections rebound slightly, the governor’s proposal ignores the reality of growing community needs and continues to underinvest in public structures that are critical to the state’s fiscal health.

2 Comments

  1. Doug

    April 4, 2013 at 1:10 pm

    As our friend jlp said and I agree with, we need to let this play out and enjoy this bold new direction for the state government. It will take time to get all the democrat fat out of the system, then we can go on to spend on potential needs when the state and economy gets on a sound footing. There is no way to tell if your liberal hysteria is correct or if this is the wrong path yet, but it is looking pretty good.

    jlp75
    April 1, 2013 at 6:46 pm
    “There is not enough information to determine if we are on the “right path”. Many decisions good or bad take years or even decades to take significant effect.”

  2. Alex

    April 6, 2013 at 2:20 pm

    This looks like an excellent budget !