- North Carolina’s state budget has nearly quadrupled in size in the last 30 years
- The budget grew more than four times as fast as population
- Irresponsible state legislators inflated a massive state budget bubble prior to the Great Recession
Over the last thirty years, North Carolina’s state budget grew at a rate more than four times the state’s rate of population growth.
Progressives like to selectively cherry-pick the high-water spending mark of 2009 to use as a baseline comparison to current spending levels to make the case that somehow the state budget has been ‘cut to the bone.’
A reminder of long-term spending trends, however, provides a more complete picture.
As shown in the chart below, the state’s General Fund budget grew by a whopping 265 percent from 1989 to 2019. At the same time, the state’s population grew by 62 percent, less than one-fourth the rate of the state budget.
In nominal dollar terms, the state budget grew from $6.6 billion in 1989 to $23.9 billion last year.
After adjusting for inflation, state spending more than doubled during that time, while inflation-adjusted per capita spending grew by 27 percent.
In other words, the amount of real state budget spending per person in North Carolina has grown by more than a fourth since 1989.
In just one generation, North Carolina’s state budget spending, when viewed on a per capita inflation-adjusted basis, has expanded by a full fourth of its previous size.
Moreover, when we look at the long-term trend, it becomes readily apparent how misleading it is for progressives to use 2009 as a baseline comparison. The build up to 2009’s Great Recession was a major outlier even among the already unsustainable trend of state spending growth.
From 2003 to 2009, the state budget exploded by an astounding 49 percent. The rise marked a 29 percent hike even after adjusting for inflation. The recession popped this massive state spending bubble, and new leadership sent to Raleigh by voters in 2010 established a more restrained budget growth path ever since.
When progressives point to 2009 as a baseline comparison, however, they never mention just how extreme the build up in spending was in the several years prior. Attempting to re-inflate the state budget bubble would require crushing tax hikes that would stifle economic growth and put countless North Carolinians out of work. Low-skilled, low-income households would unquestionably be hardest hit.