How to compare budgets

The State Capital and Infrastructure Fund is creating a load of confusion this budget season. The SCIF (pronounced “skiff”) was created in 2017 to wean the state from debt to pay for capital projects. Each fiscal year, 4% of General Fund tax revenue and 25% of unreserved cash from the previous year goes to the SCIF instead of being available for General Fund appropriations.

For FY2019-20, Unreserved Cash Balance is $998 million. The SCIF receives 25% of that, or $249.5 million.

Tax Revenue is forecast to be $23.8 billion. The SCIF receives 4% of that, or $952.8 million.

From the $1.202 billion in the SCIF, $721 million pays for debt service, $250 million is set aside for repairs and renovations, $215 million pays for capital projects, and the remainder is available for future years.

That $721 million is the tricky part. In the current FY2018-19 budget and in Gov. Cooper’s proposed budget for FY2019-20, debt service is appropriated. As a result, to accurately compare spending and availability in the House budget bill with either current spending and availability or Gov. Cooper’s plan, we have to add or subtract roughly $720 million.

The House budget bill would spend $23.9 billion in FY2019-20, which is the reported budget amount and excludes debt service. The Governor proposed $24.5 billion in FY2019-20 excluding $721 million in debt service. The current budget spends $23.2 billion in FY2018-19 excluding $717 million in debt service. Using these numbers, the governor proposed a $1.3 billion dollar (5.6%) spending increase, $600 million more than the House’s proposed $700 million (3.1%) increase.

We make pro forma spending adjustments based on the House budget bill with the SCIF because that is how budgets will be developed starting this year until the statute changes.

 

Joseph Coletti / Senior Fellow

Joe Coletti is a senior fellow at the John Locke Foundation focused on fiscal policy issues. He previously headed the North Carolina Government Efficiency and Reform initiativ...

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