A few observations about the Senate’s budget plan:
- Total spending includes $18.99 billion outlined in the state budget, plus $1.04 billion in federal funds replacing state funds already embedded for this year in last year’s budget bill (but counted as cuts), and $561 million in additional federal funds added this year and dedicated primarily to the state’s Medicaid program.
- The $20.59 billion in state spending would mark a $200 million increase over the budgeted real spending of $20.4 billion (including federal funds) included in the current 2009-10 budget.
- Indeed, compared to 2008-09 actual appropriations of $19.65 billion, the Senate’s proposal would increase state spending over a two year period of nearly one billion dollars – roughly 4.8% – during the “greatest recession since the Great Depression.”
The Senate plan also includes a sensible tax rate reduction on small businesses. The cut is small – especially in light of the more than$1 billion tax hike passed last year – but should be recognized as a step in the right direction towards creating a more competitive business environment in North Carolina.
The Civitas Institute is working on a more detailed breakdown of the Senate budget proposal, check back at our home page in the coming days for more details.