state budget

Despite a $1.3 billion deficit, Gov. Mike Easley will propose up to 6 percent higher spending in his 2005-06 budget, even with small proposed savings in most agencies. Medicaid and education spending have grown rapidly, and will continue apace. Instead, the governor plans to keep the temporary half-cent sales tax and add a large cigarette tax to pay for higher spending. This is no way to address what the Fiscal Research Division calls a structural budget deficit.

RALEIGH — A major cause of North Carolina’s continuing budget woes is rapid growth in Medicaid spending, where the state has some of the highest expenditures in the South, according…

States have three direct policy levers to control Medicaid growth: eligibility, services, and payments. North Carolina’s mix of policies has led to some of the highest costs in the South, but the Blue Ribbon Commission on Medicaid Reform would make it even costlier. Tennessee and Mississippi, the two Southern states with higher per capita costs in 2000, have since made significant changes. Georgia and Virginia present different ways to reduce costs, while a 2001 report for the General Assembly presented largely unexploited savings.

RALEIGH — As another large state budget deficit has some urging North Carolina lawmakers to “reform” the tax code to confiscate additional hundreds of millions of dollars, the John Locke…

RALEIGH — North Carolinians appear to be more committed to voting this November than they have been in the past four election cycles, but there is no clear consensus on…

As the North Carolina Senate prepares to vote on its proposed 2004-05 budget plan, it is important to keep in mind that an accounting change included in the plan has the effect of masking the magnitude of the proposed increase.

State legislators are currently considering proposals to issue hundreds of millions of dollars in additional debt without seeking voter approval. The billions of dollars worth of bonds and other debt already approved since 1996 have more than quadrupled the state’s debt service and represent as much as a third of the fiscal impact of the tax hikes passed by the General Assembly since 2001. It’s no wonder politicians are wary of asking voters for more. But that’s why they should.

RALEIGH — State lawmakers in Raleigh are currently debating bills that would authorize at least $760 million in new state debts — for land acquisition and for proposed University of…

As the 2004-05 budget process continues, policymakers should use regional and historical benchmarks to identify where to look for savings. Among major budget items, North Carolina spending on K-12 education and law enforcement is at the regional average but its Medicaid and higher-education expenses are higher than in comparable states. Reasonable restraint would save enough money to repeal last year’s tax hikes and catch up on deferred repairs and renovations.

For the first time since 2001, Gov. Mike Easley is proposing a budget plan that does not include new tax increases. However, his 2004-05 plan does contain hundreds of millions of dollars in new spending financed by previous, costly tax hikes on North Carolina families and businesses. A better fiscal choice would be to eliminate low-priority items from the budget and repeal prior sales and income tax increases. The best choice would be to implement JLF’s Freedom Budget plan.