fiscal responsibility

The John Locke Foundation is continuing its tradition, started in 1995, of offering an alternative to the governor’s budget recommendation. Consistent with prior years, this JLF budget focuses on core government. This budget spends less in both years of the biennium than the governor’s, and only increases spending by 2 percent from the last fiscal year.

For fiscal year 2014-15, North Carolina’s General Fund budget rose 2.2 percent to $21.1 billion. It funded an average teacher salary increase of 7 percent, one of the largest pay raises for North Carolina teachers in a generation, and created a Medicaid contingency fund of $186.4 million.

Although state revenue estimates are growing at the rate of about $100 million each month, the North Carolina House managed to pass a $17.1 billion budget that requires even higher taxes than the Senate’s bill. Spending would grow 7.5 percent. Despite this, some representatives claim that the budget is a model of fiscal responsibility because it ties recurring funds to recurring obligations. Fiscal responsibility does not require $778 million in new taxes or $376 million in transfers and new fees. “Reverse logrolling” in the conference is the last best hope for the General Assembly to become responsible.