For the first time in recent memory, the General Assembly is well underway in putting together the state budget before session has even started. For fiscal conservatives, anyone interested in sound budget management and taxpayers, this is good news.
Legislative leaders started the budget process by establishing, based on actual revenue and projected surplus growth, how much they can spend. On the other hand, many others, including Governor Roy Cooper started the budget process with what they wanted. And what they want is more funding for more spending for more government. Just as families across North Carolina start their budgets with what their income is and develop spending priorities within that income, so does this year’s General Assembly with our state’s budget. Smart budget management 101: What’s your income, what are your priorities, spend wisely and responsibly, stay within your means.
Based on revenue facts and projections from experts, legislative leaders have settled on $23.9 billion for total general fund spending for FY 2018-19. That’s 3.85 % increase over last year, within the growth rate of population and inflation. North Carolina is now the ninth largest state in the US with millions of people chosing to move to NC to take advantage of low tax rates, fewer regulations, smart investments in infrastructure and education. With more people, there is increased pressure on state government to meet the needs of a growing state. Keeping the growth of state government at or under the growth of population plus inflation keeps the state budget sustainable and accountable. That’s responsible fiscal management. An even lower rate of growth would protect us from future economic downturns, ensure future spending is sustainable with tax cuts.
They’re sticking with the good stuff in last years’ budget. During the 2017 long session, lawmakers passed a two-year budget so technically they don’t have to do anything this year. Already baked into this year’s budget are additional tax cuts; the personal income rate will go from 5.499% to 5.25%, the corporate tax rate will go from a national low of 3% to an even lower rate of 2.5% and the zero tax bracket increases from $17,500 to $20,000 for married couples filing jointly. There’s a 6.1% average pay increase for teachers, the fifth consecutive raise they’ve received. A portion of the $274 million revenue surplus will go into savings. More money goes for infrastructure, capital needs and shoring up the state pension fund and health plan for teachers and state employees. That adds up to a good starting point for short session budget adjustments.
It costs taxpayers more than $50,000 a day when the General Assembly is in session.Having the budget process started and spending limits established before session starts cuts down on the days and costs for the short session. It’s nice to have folks in charge of this $23.9 billion exercise respectful of North Carolina’s hardworking families, recognizing the responsibility that comes with spending other people’s money.
The short session of the 2017-2018 biennium will start on May 16. Adjustments to the budget will be front and center from day one. There will be other issues to be considered, of course and we’ll be watching. What we know so far? They are off to a good start.
