NC Budget and Tax Center

It’s official: Legislature’s new budget marks TEN consecutive years of declining state investments

The legislature has released a $23.9 billion budget for the 2018-19 fiscal year that fails to invest adequately in our schools, communities and people. Under the budget, total state spending for FY2019 remains below 2008 pre-recession spending as the proposed budget marks ten consecutive years that state spending has declined as a share of the state’s economy. The budget for FY2019 – which runs from July 2018 to June 2019 – increases spending by 3.8 percent over the prior fiscal year, but this modest increase does not make up for years of under-investment in North Carolina.

The budget released yesterday will keep giving out tax breaks in 2019 to wealthy people and profitable corporations, instead of investing those resources in growing a prosperous North Carolina.

 

The new budget includes a total of $24.4 billion in revenue available for public investments for FY19. The majority of this revenue is raised through the state’s tax system, which is expected to provide $22.9 billion in base General Fund revenue for FY19. In addition to this base revenue, lawmakers rely on revenue collections coming in above what state officials anticipate ($356.7 million); money from the most recent fiscal year they anticipate agencies will return to the state (known as reversions, estimated at $275 million); non-tax revenues ($911 million); and unappropriated dollars from the most recent fiscal year ($499.4 million). In total, there will be $24.4 billion in revenue available to lawmakers for public investments for FY19.

Unfortunately, lawmakers do not fully appropriate the $24.4 billion of available revenue for FY19, and instead plan to carry over $561.3 million. This means continued inadequate state support for public investment across the state budget — public schools, higher education, health services, and economic development, at a time when North Carolinians have been calling and marching for adequate investments.

Furthermore, the legislature plans to grant $900 million in new tax cuts for wealthy people and profitable corporations starting in January 2019, building on a failed tax-cut experiment that has already resulted in $2.6 billion in annual revenue losses.

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.

Check Also

On taxes there is a different set of rules that helps the rich, but not the working class

Tax revenues support public investments and therefore are ...

Top Stories from NCPW

  • News
  • Commentary

Chief US District Judge Terrence Boyle, a New Jersey-born jurist known for his bristly disposition a [...]

More than two dozen people crowded into a conference room at the North Carolina Judicial Center Wedn [...]

If North Carolina goes forward with the recommendation to allow a private charter operator to take c [...]

Early voting starts today, which means North Carolinians will finally get to decide on six proposed [...]

On Monday night of this week, acclaimed education researcher Richard Rothstein spoke to community me [...]

There are a lot of strange – even downright bizarre – aspects to the ongoing effort by North Carolin [...]

The power of the vote extends beyond any single electoral outcome. It has the potential to lift up i [...]

The post Nix all Six appeared first on NC Policy Watch. [...]