Featured image for article
Photo by Ricardo Arce on Unsplash

How to set a budget target

The Taxpayer Bill of Rights proposed in SB717 includes language that, if adopted, would preempt the kind of debate currently raging between the Senate and House over how to calculate the spending limit for a year. It would be a good addition to statute regardless what happens with the constitutional amendment.

“Allowed State fiscal year spending” means the amount permitted under this formula if spending followed the formula every year since the State fiscal year that began July 1, 2018.

General Fund appropriations for FY 2018-19 totaled $23.9 billion, including $0.7 billion in debt service. Using the three-year average population and inflation figures for the intervening fiscal years, the allowable spending for FY 2021-22 would be $26.1 billion, including $0.7 billion in debt service. Since debt service will be paid from the State Capital and Infrastructure Fund, the actual cap on appropriations for FY 2021-22 is $25.4 billion.

Joseph Coletti / Senior Fellow, Fiscal Studies

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...