RALEIGH -- Recent media reports have unveiled some of the state government agency spending reductions submitted to Gov. Perdue at her request. Predictably, the revelations prompted apocalyptic warnings from those who advocate for more government to correct all of society's ills.
The warnings typically follow a well-worn script followed by liberal advocacy groups for years: thousands of teachers and caregivers will lose their jobs, "progress" will be set back decades and all that is good about the state will be destroyed.
Sober examination of actual budget figures, however, suggests that the latest budget crisis is merely a minor speed bump on North Carolina's long-term expansion of government growth. Wild-eyed claims of unspeakable suffering offer no value and need to be placed in proper context.
Frequently used is the rhetorical claim that state programs are grossly "underfunded." Such claims may appeal to the sympathetic ear, but offer no perspective. Exactly what level of funding would be sufficient? Seldom is there an answer.
Next is the very real threat of some state employees losing their jobs. To paint the bleakest of all pictures, big-government advocates will list the most sympathetic of state workers, such as schoolteachers and mental health workers. Notably absent are the tens of thousands of non-classroom administrators, redundant paper-pushers or retirees pulling in six-figure pensions.
From 2001 to 2009, North Carolina state government added nearly 35,000 workers. Surely these were not all teachers or caregivers for the elderly.
Indeed, over the period 1999-2009, state-funded non-teaching "instructional support" positions in North Carolina public schools swelled by nearly 5,000. Growth in such non-classroom staffers exploded by 57 percent, nearly three-and-a-half times the growth rate of student enrollment.
In short, 10,000 state jobs could be eliminated next year and state government would still have 25,000 more workers than a decade ago.
Moreover, with salaries and benefits for state workers being the overwhelmingly largest budget expenditure for taxpayers, it is interesting to note that the average salary for a North Carolina state government worker is more than 12 percent higher than that of a private-sector worker. This pay disparity has doubled in the last decade.
Put differently, state government workers could receive an average 10 percent cut in salary, and the salary of the average state worker would still be higher than North Carolina's average private sector worker.
And what about wiping out decades of "progress"?
For starters, I would disagree with the worldview that defines "progress" as an expansion of government power. Moreover, from the state budget's perspective, we can see that very little "progress" will be reversed.
An examination of annual state budgets shows that from 1979-2009 - even after adjusting for inflation - state spending in North Carolina tripled. Furthermore, inflation-adjusted spending grew at more than three times the rate of population growth.
All of this data, however, still doesn't take into account one important fact: the state General Fund budget isn't the only money being spent on government programs in North Carolina. Billions in federal government dollars, mostly for education, transportation and social welfare programs, are sent from Washington to Raleigh every year to supplement expenditures on state programs.
In the current fiscal year, it's projected that North Carolina will receive $13.6 billion in federal dollars. If that amount is combined with the $18.98 billion state General Fund budget and $2.36 in transportation expenditures, total spending on state programs is $34.9 billion.
Looking ahead to next fiscal year, these realities lend some perspective to the budget situation predicted by some to thrust North Carolina into a "dark, crumbling" state of existence.
Expiration of the $1.3 billion in state "temporary" tax revenue and $1.6 billion in federal stimulus funds, along with $300 million in one-time spending reductions, will add up to a $3.2 billion structural deficit. Even holding state revenue and federal funding flat for next year, and subtracting the $3.2 billion structural deficit, total available revenues would come in at $31.7 billion.
That total would merely reset total state spending to a level slightly less than FY 2006-07.
And for even more perspective about how "underfunded" state programs would be: a total budget of $31.7 billion would still be a full 34 percent higher than 2001-02 expenditures, and virtually twice the spending from just 15 years ago.
Dire predictions will be numerous this upcoming legislative session. Just be sure to view the fear mongering in the proper context and realize how we have arrived in this budget situation in the first place.
