We've heard the handwringing already beginning about the estimated $1.2 billion (or so) budget shortfall that NC is facing next year. One question that needs to be continually asked is why did we get it this situation?
Steve Malanga of the Manhattan Institute writes an op-ed in today's WSJ that attempts to provide some clarity on how states look at budgets.
First he looks at how many states got into this problem — through boom and bust irresponsible budgeting that spent like drunken sailors in good times, setting the stage for further problems.
collectively boosted general-fund budgets by an annual average of some
6.4%. In just 2006 and 2007 alone they added about $100 billion. During
the period from 2003-2008, states also took on 38% more debt,
increasing their collective indebtedness to $2.19 trillion."
Sound familiar? In fact, NC is much worse. The last four budgets in NC have increased spending by $5.5 billion or 34%. And the state debt has more than doubled.
Malanga has other ideas for states, namely: stop running up debt, stop caving in to public employee unions and look to privatize things like toll roads.