Recent media reports have unveiled some of the state government agency spending reductions submitted to Gov. Perdue at her request. Predictably, the revelations prompted apocalyptic warnings from those who advocate for greater concentration of power in the hands of the ruling class.
Case in point is Rob Schofield of the extreme liberal group N.C. Policy Watch. In the November 23 issue of the Raleigh News & Observer, Schofield unleashed this dire warning:
"These kinds of cuts would be an absolute disaster. They would decimate a host of already underfunded programs and wipe out decades of progress. We’re talking about firing thousands of teachers, health care providers, mental health workers, and providers of aid to seniors.
"If we want North Carolina to look like some dark, crumbling rust belt state that’s all but given up on progress, that is merely trying to survive, these are the kinds of cuts we would implement”
Schofield barely stops short of the worn out cliché “people will be dying in the streets!”
Sober examination of actual budget figures, however, suggest that the latest budget crisis is merely a minor speed bump on the out-of-control race down North Carolina’s budget highway. Wild-eyed claims like Schofield’s offer no value and need to be placed in proper context.
First is the rhetorical claim that state programs are “already underfunded.” Such claims may appeal to the sympathetic ear, but offer no perspective. Exactly what level of funding would be sufficient? Liberals never provide an answer.
Next is the very real threat of some state employees losing their jobs. To paint the bleakest of all pictures, big-government advocates will list the most sympathetic of state workers like school teachers and mental health workers. Notably absent are the tens of thousands of non-classroom administrators, redundant paper-pushers or retirees pulling in six-figure pensions.
From 2001 to 2009, North Carolina state government added nearly 35,000 employees. Surely these were not all school teachers or providers of aid to seniors. Indeed, over the period 1999-2009 state-funded nonteaching “instructional support” positions in North Carolina public schools swelled by nearly 5,000. Growth in such non-classroom staffers exploded by 57 percent, nearly three-and-a-half times the growth rate of student enrollment.
Moreover, with salaries and benefits for state workers being the overwhelmingly largest budget expenditure for state taxpayers, it is interesting to note that the average salary for a North Carolina state government worker is more than 12 percent higher than that of a private sector worker. The pay disparity has doubled in the last decade.
And what about “wiping out decades of progress”? For starters, I would disagree with Schofield’s worldview which defines “progress” as a greater accumulation of power into the hands of politicians and bureaucrats. But from the state budget’s perspective, we can see that very little “progress” will be reversed. A look at the thirty-year time span from 1979-2009 shows that – even after adjusting for inflation – state spending in North Carolina tripled during that time. Furthermore, inflation-adjusted spending grew at more than three times the rate of population growth.
All of this data, however, still doesn’t take into account one important fact: the state General Fund budget isn’t the only money being spent on government programs in North Carolina. Billions in federal government dollars, mostly for education, transportation and social welfare programs, are sent from Washington to Raleigh every year to supplement expenditures on state programs. In the current fiscal year, it is projected North Carolina will receive $13.6 billion in federal dollars. If that amount is combined with the $18.98 billion state General Fund budget and $2.36 in transportation expenditures, total spending on state programs is $34.9 billion.1
Looking ahead to next fiscal year, these realities lend some perspective to the budget situation predicted to thrust North Carolina into a “dark, crumbling” state of existence. Expiration of the $1.3 billion in state “temporary” tax revenue and $1.6 billion in federal stimulus funds, along with $300 million in one time spending reductions will add up to a $3.2 billion structural deficit. Even holding state revenue and federal funding flat for next year, and subtracting the $3.2 billion structural deficit, total available revenues would come in at $31.7 billion. That total would “regress” total state spending to a level slightly less than FY 2006-07.
And for even more perspective about how “decimated” state programs would be; a total budget of $31.7 billion would still be a full 34 percent higher than 2001-02 expenditures, and virtually twice the spending from just 15 years ago ($16.25 billion in FY 1995-96).
Schofield’s comments are but a preview of the extreme claims of hardship and suffering coming from supporters of government largesse that we are sure to hear in the upcoming legislative session.
Amid all this fear mongering, however, let’s remember to keep the current budget situation in perspective:
- 10,000 state jobs could be eliminated and state government would still have 25,000 more workers than a decade ago
- State government workers could receive an average 10 percent cut in salary, and the salary of the average state worker would still be higher than North Carolina’s average private sector worker
- From 1979-2009 – even after adjusting for inflation – the state’s General Fund expenditures exploded at a rate more than three times population growth
- Even with the $3.2 billion structural deficit, total spending on state programs (including transportation spending and federal funds) for next year would be 34 percent higher than 2001-2, and double the spending level from only 15 years ago