The House budget passed late last night patches over part of the funding cliff facing North Carolina’s public schools next year, but only temporarily. The majority of the House budget’s $248 million increase in public school funding is one-time money, meaning that while the state’s public schools would dodge yet another round of damaging cuts in the upcoming school year, they would have to brace for yet another state budget fight in the following year, FY2013-14, when they will face yet another yawning budget gap – this time in the vicinity of $688 million. BTC looked closely at the House’s K-12 public education budget in the context of historic and pre-Great Recession state investment in public education and found that it would still fall far short of average annual state investment in public education over the last 40 years.
We didn’t borrow any money. We didn’t raise taxes. We spent what came in. – Rep. Brubaker, House floor debate on H.B. 950, the FY2012-13 continuation budget.
That would be true if Rep. Brubaker had added, “… and a bit more, besides,” to the end of his statement. Every year, state budget writers sum up on a single page how they raise the billions of dollars that fuel the state budget – the availability statement – while the rest of the state budget requires hundreds of pages of detail. For all its importance, the availability statement itself gets relatively less scrutiny and public debate than the rest of the budget. The Budget and Tax Center has analyzed the availability statement proposed within the House budget and found the following items to be noteworthy:
- The $19.7 billion that “came in.” Base revenues of $18.9 million – primarily from the state income tax, sales tax, and corporate income tax – and nontax revenues of $773 million constitute what’s expected to “come in” in FY2012-13. The House budget’s spending side requires $20.2 billion. That alone left approximately $503 million that budget writers had to “find” in order to balance their budget – a number that increases when current-year liabilities like the nearly $200 million Medicaid shortfall come into consideration. Read more
Legislative leaders met in a meeting of the House appropriations committee this morning to consider S.B. 797, which would allocate funds to meet the state’s current year Medicaid shortfall. Estimates of this year’s Medicaid budget gap have proved to be a moving target, initially estimated at around $139 million, then growing to $149 million in the wake of a federal court order reinstating coverage of personal care services for adults with disabilities. This morning, House appropriations chair Rep. Brubaker explained that legislative leaders and the Office of State Budget and Management have agreed to revise the estimate of the current-year Medicaid shortfall upwards to $205 million, with the increase being driven by higher-than-estimated program utilization across all categories of eligibility. Read more
This morning, members of the House education budget subcommittee floated a list of budget options for public education that included potentially restoring $259 million in unspecified, recurring cuts to the state public school budget. This amount is equivalent to the state providing funding to “backfill” the loss of federal EduJobs dollars that will expire in September of this year. The options list also included potential elimination of a $74 million cut to the schools that is scheduled to take effect at the beginning of FY2012-13. If both options were adopted, it would effectively fund the total public school budget, comprised of state, federal, and local funds, at roughly the same overall level as FY2011-12. Read more
In what felt to many observers like just moments after Governor Perdue released her FY2012-13 budget proposal last week, House appropriations subcommittees began releasing their targets for revisions to the upcoming year’s budget. While these targets – which are presented to subcommittee members as a total dollar amount, often accompanied by a list of “options” addressing more specific programs and line items that could be altered – don’t necessarily speak to all adjustments lawmakers could make in the short session, they do provide a fair bit of insight into what we’re likely to see later this spring when the first budget bill is introduced. Here’s the Budget and Tax Center’s quick take on the House targets as introduced, compared to the current law budget, the Governor’s proposed budget, and inflation-adjusted pre-Recession state spending: