Lawmakers and special interest groups around Raleigh are in full-out panic mode over the state budget situation. Fears of "deep and draconian cuts" abound. But let's back up and have a look at the numbers.
First off, when we hear government officials speak of the budget "deficit" for the coming fiscal year, what they are referring to is a gap between what they wanted to spend and the projected revenue for next year.
Furthermore, if the latest revenue projections are correct, it appears that state government (with the help of federal stimulus dollars) will spend more next year than it will this year. Here's how:
- For the current year, budgeted spending was $21.35 billion. The revenue estimates place the deficit at $3.2 billion – meaning the state will spend $18.15 billion for FY 2008-09
- For next year, revenues are estimated to be $17.5 billion. Another $1.4 billion in federal funds will also be available for the state to spend – meaning that the state, even without any tax or fee increases, will be able to spend $18.9 billion for FY 2009-10.