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North Carolina’s state budget (General Fund) has grown by 43.7 percent in the last five years, adding $6.5 billion in new spending. Even after adjusting for population growth and inflation, the FY 2008-09 budget spends 13.2 percent more per person than in FY 2003-04.
A review of the major categories of spending reveals the state’s priorities over the past five years, by rate of increase.
| (dollar amounts expressed in millions) | FY 2003-04 | FY 2008-9 | $ Increase | % Increase |
| K-12 | $6,030 | $7,802 | $1,772 | 29% |
| UNC System | $1,795 | $2,683 | $888 | 50% |
| Community Colleges | $659 | $933 | $274 | 42% |
| Medicaid/Health Choice | $2,319 | $3,249 | $930 | 40% |
| Rest of HHS | $1,338 | $1,666 | $328 | 25% |
| Justice & Public Safety | $1,547 | $2,089 | $542 | 35% |
| Natural & Economic Resources | $375 | $573 | $198 | 53% |
| General Government | $325 | $459 | $134 | 41% |
| Debt Service | $389 | $643 | $254 | 65% |
| Transportation | $2,361 | $2,914 | $553 | 23% |
- Three categories of spending have outpaced overall General Fund spending growth:
- Debt service, the money required to pay down the interest and principle of the state’s debt, grew at the fastest rate of any category with a 5-year growth rate of 65 percent
- Natural and Economic Resources (NER), administers a wide variety of endeavors including: environmental protection, corporate welfare and other economic development, agriculture and consumer services, land purchases, museums, aquariums and the state zoo. NER experienced the second highest rate of growth, with a 5-year growth rate of 53 percent
- UNC system appropriations have increased rapidly, with a five year growth rate of 50 percent. This increase, however, doesn’t fully reflect spending growth on the UNC system. Because much of the new building construction on campuses has been debt-financed, spending for new construction is reflected in rising debt service payments
- K-12 spending increased at the slowest rate of the three education categories (K-12, UNC, Community College)
- Medicaid/Health Choice spending rose significantly higher than the rest of HHS spending (i.e. mental health, child development and various social services)
- Transportation spending, while separate from the General Fund, grew at the lowest rate of any major category (23%). For instance, NER spending grew at more than twice the rate of transportation over the last five years.
