Three Numbers You Won’t Hear About This Year’s Budget

As the state budget agreement moves through the legislative approval process toward Gov. McCrory’s desk, there is plenty  of media coverage summarizing the major issues addressed in this year’s spending plan, such as teacher pay, tax cuts and rainy day funds. Check out nccapitolconnection.com for one such overview.

But to step back for a moment and remind people of the big picture trends about the state budget, here are three numbers you likely won’t be seeing in budget coverage that you should keep in mind:

• $5.5 Billion  – This was the size of the state budget 30 years ago, a drop in the bucket compared to the $22.3 billion for this year’s budget plan. The state budget is now four times larger than it was 30 years ago. And this can not be explained away by the state’s population growth or inflation, as we’ll see in the next point.
• 42% –  This is the increase in per capita, inflation-adjusted state spending growth over those 30 years. In other words, the state budget now spends 42% more money per person in North Carolina compared to 30 years ago – even after adjusting for inflation. Keep this in mind next time a liberal progressive insists that state government has been “cut to the bone”.
  • And this does not account for the even more rapid growth in Federal Government dollars flowing into the state
• Two–thirds (or 66%) –  The share of General Fund spending devoted to state worker salary, benefits and retiree pensions & benefits  (this amounts to roughly $14.5 billion). If you want to know where your state tax dollars go, two-thirds of every dollar goes to pay state government workers and retirees. Health care expenses for workers and retirees, along with growing pension liabilities, are rising rapidly and represent a growing recurring spending commitment.