For the first time in recent history, North Carolina has failed to pass a final state budget. Absent a comprehensive budget, the state leaders are passing individual spending bills, or “mini budgets.” Comprehensive budgets are preferable to piecemeal legislation because they allow for greater fiscal control, oversight, and planning. Unifying state spending within a single document helps monitor performance over time, provide clarity to the public on priorities, and facilitate long-term sustainability.
In 2015, the Organization for Economic Cooperation and Development (OECD) released a set of budgetary principles imploring governments around the world to “present a comprehensive, accurate and reliable account of the public finances.” Without a complete budget, it is nearly impossible to achieve accuracy, clarity, inclusive participation, and transparency while maximizing value for money.
Ignoring these principles creates significant risks for duplicative spending, fragmentation, misinterpretation, inaccurate calculations, inadequate appropriations, and inaccessible documentation of expenditures. Together, these risks and realities compromise North Carolina’s fiscal health, undermine the credibility of the state, and “shake the foundations of our democracy.”
Failing to pass a comprehensive budget also restricts North Carolina’s ability to track how investments change over time. Even as GDP continues to rise, state investments as a share of GDP are at an all-time low. Research by the Washington Center for Equitable Growth confirms that low-income children and families are disproportionately harmed by under-investment in infrastructure, education, and innovation.
Coupled with tax cuts for the rich, widening economic inequality keeps people from realizing their full potential and slows overall productivity. Now, when the economy is growing and interest rates are low, the state should be funding infrastructure projects that bring transportation to disconnected communities, public education initiatives that close the achievement gap, and research and development that can be used by businesses and entrepreneurs to spur innovation and growth.
State budgets are important for many reasons, not the least of which is determining whether government spending is aligned with community needs and public priorities. Breaking the budget up into bite-sized bills makes it easier for special interests to influence spending decisions, increases structural inequality, and exacerbates socioeconomic disparities. If North Carolina wants to build a stronger, more vibrant, more inclusive, and more sustainable economy, it should pass a comprehensive budget that prioritizes public investments and cultivates shared prosperity.
Leila Pedersen is a Policy Analyst with the Budget & Tax Center, a project of the NC Justice Center.