From Alexandra Forter Sirota, director of the N.C. Budget and Tax Center:
The N.C. House budget proposal, while acknowledging the need for state reinvestment in a few key public structures, continues to fall short of meeting the needs of our communities in this economic recovery.
Moreover, legislative leaders have chosen to rely on $815 million in one-time money to meet the state’s recurring needs in education, health, safety and infrastructure. This budget is at best a temporary fix, one that is neither sustainable nor adequate in its provision of the certainty and stability necessary to North Carolina’s economic recovery. The impacts of a cuts-only approach are clear in communities across the state: fewer teachers, less access to health care, higher costs to accessing the courts, and reduced protections for the health and well-being of our environment and communities.
House budget writers have only temporarily and partially restored some of the deep cuts made to these investments in last year’s budget. Under this budget, there will still be fewer dollars for need-based grants for university students, fewer slots for children in N.C. Pre-K, a continued shortfall in Medicaid, fewer dollars to provide public transit in our urban communities, and further reductions to environmental protections and infrastructure next year. The plan falls far short of what is needed to meet the state’s recurring obligations, let alone to restore the level of state investment needed to provide all the state’s children with a quality education and keep our communities healthy and safe.
House budget writers chose not raise revenue to address these fundamental needs. Instead, they have crafted a budget that is dependent on $815 million in one-time money – an amount even greater than what would be raised by increasing the state sales tax by 0.75 cents, as Gov. Bev Perdue proposed.
Unlike raising revenue, this approach still fails to meet existing demand for educational services. Moreover, it fails to provide any security to educators across the state who will face yet another half-billion dollar budget gap in FY2013-14. Even with the addition of one-time money, the House budget would continue spending $2.5 billion (11 percent) less than pre-recession levels and $613 million (3 percent) less than the governor’s revenue-inclusive budget proposal.
While the House budget partially addresses the upcoming Medicaid shortfall with $130 million in recurring funding, it does not commit enough resources to address the entire $243 million projected shortfall. Moreover, the projected savings expected from Community Care of North Carolina, the state’s managed care program, on top of existing projected savings could result in further reductions.
The House budget conforms with the governor’s proposal and caps the gas tax, severely limiting the state’s ability to ensure the safety of our roads and bridges and the transportation system necessary for the 21st century economy. This is particularly troubling because the gas tax cap is paid for in part by cuts in aid to municipalities as well as funding for public transit when many working North Carolinians rely on public transit as their only means to get to work.
North Carolina must rebuild and reinvest after this downturn. Recommitting to support the state’s growth and opportunities requires a balanced and sustainable approach, one that responsibly looks at revenue as a tool to improve the state’s long-term fiscal condition. The House budget proposes piecemeal corrections to a fundamentally flawed biennial budget. Anything less than a long-term, balanced approach will fail to address the fundamental needs of North Carolina today and in the future.