Tag: state budget

Local School Systems Face Challenging Budget Environments for Upcoming School Year

April 16, 2013 at 9:07 amCategory:NC Budget and Tax Center

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As local school boards begin to plan K-12 budgets for the coming school year, they continue to feel the squeeze from a still-fragile economy and continued cuts in state support for public education. Since FY2009, state support for K-12 education has been cut by more than $1.3 billion and Governor McCrory’s proposed budget for FY2014 continues this trend with $85 million in cuts to K-12 education.

The budgeting environment will likely be even more challenging for the upcoming school year with the expiration of one-time federal funding. North Carolina received $297 million in federal dollars for K-12 education (“Ed Jobs” funding) as part of the American Recovery and Reinvestment Act approved by Congress in 2010. All local school systems received Ed Jobs funding, which was used to retain existing employees, recall or rehire former employees and to hire new employees. Local school systems were required to spend all Ed Jobs funds by October 2012 and no additional funding will be available for the upcoming school year. Read More…

Could McCrory’s budget adequately cope with sequestration?

April 13, 2013 at 11:07 amCategory:NC Budget and Tax Center

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It has been a few weeks since Governor McCrory released his budget proposal for the biennium that runs from July 2013 to June 2015. His proposal has received a lot of praise for building up the state’s various savings reserves, including the Rainy Day Fund, the Medicaid Risk Reserve, and the Repair and Renovations Fund.

What has been less widely scrutinized is whether the reserves in his proposal would be sufficient to cope with the first and potentially second rounds of damaging sequestration cuts to defense and non-defense programs. Read More…

Governor’s budget wipes out funding for economic development programs in distressed, minority communities

April 11, 2013 at 8:30 amCategory:NC Budget and Tax Center

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Like all budgets, Governor Pat McCrory’s proposed spending plan for FY2013-2015 is based on a set of ideas about how the world works—what spurs economic growth, what creates jobs, and the most effective ways of using state government to achieve these goals.  Unfortunately, his proposal for economic development represents quite a few bad ideas, including the sharp reduction in spending for economic development nonprofits that receive state funding through the Commerce-State Aid portion of the budget.  These nonprofits provide vital economic development resources for historically disadvantaged and persistently distressed communities and minority populations. 

At the same time, he proposes boosting spending on industrial recruitment and other traditional economic development activities that will likely bypass the communities benefitting from the work of these nonprofits, if any meaningful job creation or economic growth is generated at all.  Read More…

NC public investments still not back to pre-recession levels

March 22, 2013 at 4:37 pmCategory:Uncategorized

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A preliminary analysis of the Governor’s proposed budget by the experts at the N.C. Budget and Tax Center reports that: 

“The proposal was thin on the details for how and who would fund the spending priorities that were laid out.  The one revenue change supported by the Governor was the repeal of the state estate tax, a move that would result in the loss of $52 million.  Last year, just 23 multi-million dollar estates paid the state estate tax.  Because there was no significant change in availability, the budget is able to expand investments in certain areas by relying on spending cuts in other areas, tuition and fee increases, and the modest improvement in revenue collections to date. Below is a helpful graph to put the Governor’s proposal in perspective relative to what is needed to maintain current service levels or reach pre-recession levels.” Read More…

A quick note on the superior “compared-to-what” budget baseline

March 21, 2013 at 1:55 pmCategory:Falling Behind in NC | NC Budget and Tax Center

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It is true that the Governor’s budget proposal reinvests in some programs and services to achieve an overall increase in General Fund appropriations.  This reinvestment was made possible by improvements in the availability of revenue under current law, the reliance on tuition increases and fees, as well as reductions in other areas of the budget. However, state investments in most areas of the budget are failing to keep up —let alone make progress back to pre-recession levels of spending.

There are two primary vantage points for analyzing the Governor’s budget proposal and making comparisons over time.  One method is to measure his proposal against the current law budget, which reflects the actual dollars that were appropriated last year per the final FY2012-13 budget.  The other method measures his recommendations against the continuation—or base—budget, which reflects the dollars needed in the next year to maintain current service levels.  The latter comparison provides a better sense of what is necessary to maintain residents’ current experience of public service because it accounts for the changing costs required to deliver the same level of services approved by the previous General Assembly. The chart below contrasts the Governor’s budget proposal to each of these vantage points. Read More…